Which of the following statements is CORRECT?
The cash flows relevant for a foreign investment should, from the parent company's perspective, include the financial cash flows that the subsidiary can legally send back to the parent company plus the cash flows that must remain in the foreign country.
When considering the risk of a foreign investment, a lower risk might arise from exchange rate risk and political risk while higher risk might result from international diversification.
The United States and most other major industrialized nations currently operate under a system of floating exchange rates.
LIBOR is an acronym for London Interbank Offer Rate, which is an average of interest rates offered by London banks to smaller U.S. corporations
Due to advanced communications technology and the standardization of general procedures, working capital management for multinational firms is no more complex than it is for large domestic firms.
Which of the following statements is CORRECT?
| The cash flows relevant for a foreign investment should, from the parent company's perspective, include the financial cash flows that the subsidiary can legally send back to the parent company plus the cash flows that must remain in the foreign country. | ||
| When considering the risk of a foreign investment, a lower risk might arise from exchange rate risk and political risk while higher risk might result from international diversification. | ||
| The United States and most other major industrialized nations currently operate under a system of floating exchange rates. | ||
| LIBOR is an acronym for London Interbank Offer Rate, which is an average of interest rates offered by London banks to smaller U.S. corporations | ||
| Due to advanced communications technology and the standardization of general procedures, working capital management for multinational firms is no more complex than it is for large domestic firms. |
