A Risk-Averse Firm Would Prefer to Borrow ____ When the Expected

question 25

Multiple Choice

A risk-averse firm would prefer to borrow ____ when the expected financing costs are similar in a foreign country as in the local country.

• A) locally
• B) in the foreign country
• C) either A or B
• D) part of the funds locally, and part from the foreign country

---

Definitions:

Carport

A covered structure used to provide limited protection to vehicles, primarily from rain and snow, which unlike a garage, is open on two or more sides.

Liable

Refers to being legally responsible for something, usually implying a duty to make restitution for harm or damage caused.

Salvage

A reward given to persons who voluntarily assist a sinking ship to recover its cargo from peril or loss.

Sinking Ship

A metaphor often used to describe a situation, organization, or entity that is in deep trouble, deteriorating, or seemingly doomed to failure.