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:

Personality

A unique set of emotional, thought, and behavioral patterns that define an individual’s personal style of interacting with the environment.

Research Studies

Systematic investigations designed to develop or contribute to generalizable knowledge through careful collection and analysis of data.

Personality Research

The scientific study focused on understanding variations in individuals' thoughts, feelings, and behaviors and how these differences relate to psychological processes.

Extraversion

A personality trait characterized by outgoingness, sociability, and a tendency to seek stimulation in the company of others.