When firms decide to go international, a wide range of opportunities may be available depending upon their risk profile–the potential financial loss they are willing to take. ArcelorMittal came to existence through a series of cross-border mergers followed by a hostile takeover, leading to the world's largest steel company. Where do foreign acquisitions such as those undertaken by Arcelor (prior to their takeover by Mittal Steel) fall on the risk-return spectrum?
1) Low Risk–High Return
2) High Risk–High Return
3) Low Risk–Low Return
4) High Risk–Low Return