Question: Which of the following is true statement about political risk? It is possible for a firm to buy insurance to protect themselves from many kinds of political risk. Firms can reduce the risk they face in a country by structuring the investment contract so that the government earns more revenue when the firm, itself, is making high profits. Having a multilateral institution such as the World Bank Group as part of an investment in a developing country is one way of reducing the risk of investment. A firm's level of political risk in a particular host country may depend partly on the firm's nationality (i.e., home country). All of these are true statements.