Investment from Abroad

question 92

Multiple Choice

Investment from abroad

• A)is a way for poor countries to learn the state-of-the-art technologies developed and used in richer countries.
• B)is viewed by economists as a way to increase growth.
• C)often requires removing restrictions that governments have imposed on foreign ownership of domestic capital.
• D)All of the above are correct.

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Definitions:

Capital Asset Pricing Model

The Capital Asset Pricing Model (CAPM) is a formula used to determine the expected return on an investment based on its risk relative to the market.

Abandonment Option

A provision in a contract that allows a party to withdraw from the contract before the completion or maturity date.

Monte Carlo Simulation

A computational technique that uses random sampling and statistical modeling to estimate mathematical functions and mimic the operation of complex systems.

Probability Distributions

Probability distributions describe the likelihood of different outcomes in a stochastic process or experiment.