A US-Based Company Needs to Raise Five-Year Financing for a New

question 18

Multiple Choice

A US-based company needs to raise five-year financing for a new project.It will have to pay 5% interest for money raised in dollars,but only 2% interest for money raised in yen because interest rates are lower in Japan.Which of the following is not a risk if the company chooses to raise yen financing?

• A)The yen appreciates against the dollar,and dollar interest rates rise.
• B)The yen appreciates against the dollar,and yen interest rates rise.
• C)The yen depreciates against the dollar,and yen interest rates fall.
• D)The yen depreciates against the dollar,and yen interest rates rise.

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Definitions:

Self-managed

Describes tasks, groups, or organizations that operate autonomously, with individuals or teams making decisions without external control.

Empowering

Giving individuals or groups the authority, means, and confidence to take decisions and actions that affect their work or life positively.

Brainstorming

A group creativity technique designed to generate a large number of ideas for the solution to a problem.

Affective Conflict

Disagreement that focuses on individuals or personal issues.