In Regards to the Perspective of a U

question 45

Multiple Choice

In regards to the perspective of a U.S. investor, which of the below statements is FALSE?

• A) A French investor who acquires a yen-denominated Japanese bond is exposed to the risk that the Japanese yen will increase in value relative to the euro.
• B) Suppose that IBM issues bonds denominated in euros. IBM's foreign-exchange risk is that, at the time the coupon interest payments must be made and the principal repaid, the U.S. dollar will have depreciated relative to the euro, requiring that IBM pay more dollars to satisfy its obligation.
• C) Foreign-exchange risk is a consideration for the issuer.
• D) Any investor who purchases an asset denominated in a currency that is not the medium of exchange in the investor's country faces foreign-exchange risk.

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Definitions:

Preliminary Treatment

Preliminary Treatment involves initial medical or therapeutic interventions that are carried out after an initial diagnosis to address immediate needs or stabilize a condition before further, more specific treatments are applied.

Negotiated Behaviors

Actions or practices that are agreed upon by individuals or groups after discussion to ensure mutual benefit or understanding.

Group Guidelines

Established rules or principles meant to guide behavior and interaction within a group, aiming to facilitate cooperation, respect, and productive outcomes.

Individual Interviews

One-on-one discussions used for gathering information, understanding personal viewpoints, or conducting qualitative research.