Which of the Following Is False

question 64

Multiple Choice

Which of the following is false?

• A)Financial market participants compare expected rates of return on instruments denominated in different currencies.
• B)The expected nominal rate of return on a foreign investment is the foreign interest rate plus the change in the exchange rate less an adjustment for risk from the uncertainty of the future exchange rate.
• C)The expected real return includes an adjustment factor for expected inflation in both countries.
• D)In equilibrium, interest rates adjust so that after adjustments have been made for expected inflation and exchange rate risk, returns in the United States are only slightly more than foreign returns.

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Definitions:

Ventures

Entrepreneurial projects or businesses started by individuals or groups, often involving risk.

Venture Capital

Funding given by investors to small businesses and startups deemed to have significant potential for long-term growth.

Business Plan

A document that outlines a business's goals, strategies, market analysis, financial projections, and operational plans.

Outsource

The practice of hiring third-party firms to handle non-core business operations or services.