If an Individual Makes Her Investment Decisions Based Solely on the Net

question 7

Multiple Choice

If an individual makes her investment decisions based solely on the Net Present Value criterion,one can conclude that she is

• A) risk averse.
• B) risk neutral.
• C) risk loving.
• D) extremely wealthy.

---

Definitions:

Translation Exposure

The potential for a company's financial statements in foreign currencies to be affected by fluctuations in exchange rates.

Financial Statements

are formal records of the financial activities and position of a business, individual, or other entity, typically including the balance sheet, income statement, and cash flow statement.

Functional Currency

The primary currency of the primary economic environment in which an entity operates.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting wear and tear, deterioration, or obsolescence.