The Home Currency Approach

question 67

Multiple Choice

The home currency approach:

• A)discounts all of a project's foreign cash flows using the current spot rate.
• B)employs uncovered interest parity to project future exchange rates.
• C)computes the net present value (NPV) of a project in the foreign currency and then converts that NPV into U.S. dollars.
• D)utilizes the international Fisher effect to compute the NPV of foreign cash flows in the foreign currency.
• E)utilizes the international Fisher effect to compute the relevant exchange rates needed to compute the NPV of foreign cash flows in U.S. dollars.

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Definitions:

Unobtrusive Measures

Observations of people’s behavior without them being aware of such observation.

Researcher-Researched Relationship

The dynamic and ethical interaction between the researcher and the subjects being studied.

Unobtrusive Measures

Research methods that study the behavior of individuals without their awareness or without interfering in the natural state of those being observed.

SPEAKING Model

A framework developed by Dell Hymes to analyze the various components of linguistic communication.