Of the Following, Which Is NOT an External Source of Financing

question 61

Multiple Choice

Of the following, which is NOT an external source of financing for the foreign subsidiary?

• A) borrowing from sister subsidiaries
• B) borrowing from commercial banks in the parent country
• C) selling new stock to local shareholders
• D) All of the above are external sources of financing for the foreign subsidiary.

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Definitions:

Expected Return

The anticipated amount of returns an investment is expected to generate, calculated as a weighted average of possible returns, based on their probabilities.

Risk-free Rate

The theoretical return on an investment with zero risk, often represented by the yield on government securities like U.S. Treasury bills.

Real Estate

Property consisting of land or buildings, and anything affixed to the land, that has economic value.

Mutual Fund Shares

Units of ownership in a mutual fund, offering investors a proportionate stake in the fund's portfolio and its income.