Final answer:
The riskiest methods for firms to conduct international business are the establishment of new subsidiaries and the acquisitions of existing operations, both forms of foreign direct investment that require significant investment and carry various uncertainties. option e.
Step-by-step explanation:
The most risky methods by which firms conduct international business are generally the establishment of new subsidiaries and the acquisitions of existing operations. These forms of foreign direct investment (FDI) are considered high-risk because they involve substantial investment and exposure to foreign economic, political, and legal uncertainties. Establishing a new subsidiary involves significant capital investment in building or purchasing facilities, hiring staff, and marketing, without any guarantee of success. Acquisitions involve purchasing existing operations which come with their set of challenges such as integrating the new operations, aligning corporate cultures, or handling legal and regulatory matters in the foreign country.
In contrast, franchising as a method is considered less risky since it does not involve as significant capital investment and allows for risk to be shared with the franchisees. Although each investment mode carries particular risks, starting new subsidiaries and acquiring existing operations generally involve greater financial commitments and risks than franchising.