Which of the Following Would Decrease the Likelihood That Foreign

question 6

Multiple Choice

Which of the following would decrease the likelihood that foreign business firms will invest in a country?

• A)A low corporate profit tax rate
• B)Political stability
• C)A well-established legal system
• D)Political instability

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Definitions:

Swaps

Financial derivatives where two parties agree to exchange cash flows or other financial instruments for a set period of time.

Currency Swaps

Bilateral agreements to exchange periodic payments where the payments are based in two different currencies.

Financial Intermediary

An institution that facilitates the channeling of funds between lenders and borrowers indirectly.

LIBOR

London Interbank Offered Rate; the rate that large banks in London charge one another.