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If a Firm in Thailand Borrows Dollars from a U

question 14

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If a firm in Thailand borrows dollars from a U.S.bank, its interest payments on the loan in bahts will decrease if the baht appreciates against the U.S.dollar.


Definitions:

Standard Deviation

A parameter that assesses the extent of difference or range within a batch of numerical values.

Risk-Averse Investor

An investor who prefers lower returns with known risks rather than higher returns with unknown risks.

Slope of the Budget Line

The rate at which one good can be traded for another, reflecting the relative prices of two goods.

Standard Deviation

An indicator that calculates how much a group of figures deviates or scatters from each other.

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