Which of the Following Statements Is NOT True

question 4

Multiple Choice

Which of the following statements is NOT true?

• A) International diversification benefits induce investors to demand foreign securities.
• B) An international security adds value to a portfolio if it reduces risk without reducing return.
• C) Investors will demand a security that adds value.
• D) All of the above are true.

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Definitions:

Net Present Value Method

A method used in capital budgeting and investment planning that calculates the difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Net Present Value Method

A financial analysis tool used to determine the attractiveness of an investment by calculating the present value of its future cash flows.

Present Values

The present-day worth of a future sum of money or continual cash flows, using a particular rate of return for calculation.

Capital Investment Analysis

The process of evaluating and comparing the potential expenditures or investments of capital into projects or assets to determine their profitability and risk.