Which of the Following Statements Is FALSE

question 10

Multiple Choice

Which of the following statements is FALSE?

• A)The rate of interest paid on government bonds or other securities in a country with a tradition of weak enforcement of property rights is likely not really a risk-free rate.Instead,interest rates in the country will reflect a risk premium for the possibility of default,so relations such as covered interest rate parity will likely not hold exactly.
• B)If the return difference in a segmented financial market results from a market friction such as capital controls,corporations can exploit this friction by setting up projects and raising capital in the high-return country/currency.
• C)Important macroeconomic reasons for segmented capital markets include capital controls and foreign exchange controls that create barriers to international capital flows and thus segment national markets.
• D)A segmented financial market has an important implication for international corporate finance: One country or currency has a higher rate of return than another country or currency,when the two rates are compared in the same currency.

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Definitions:

Fertilization

The process by which a sperm cell combines with an egg cell to form a zygote, initiating the development of a new organism.

Egg Cells

Female reproductive cells or gametes in animals and plants; in humans, they are also known as ova.

Generational Groups

Categories of people born within the same historical and social context, often sharing similar values, preferences, and attitudes, such as Baby Boomers, Generation X, Millennials, and Generation Z.

Nutrition

The process by which living organisms receive and process the nutrients necessary for growth, repair, and maintenance of the body.