Which One of the Following Is a Reason for Firms

question 3

Multiple Choice

Which one of the following is a reason for firms to engage in currency swaps?

• A) They will be required to repay only the interest.
• B) They can obtain more favorable terms by borrowing in a different currency.
• C) The debt will not show on their balance sheets.
• D) You can borrow in the currency with the lowest interest rate without taking on any currency risk.

Analyze the effect of investor psychology on portfolio optimization and market outcomes.

Explain the role of public policy and behavioral economics in addressing issues of energy consumption and environmental impact.

Understand the significance and impact of major economic events, such as the recession of 2008.

Comprehend the implications of assumptions about consumer and firm behavior on public policy design.

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Definitions:

Short-term Memory

The ability to keep a limited quantity of data actively accessible in one's consciousness for a brief duration.

Miller

George A. Miller was an American psychologist who made significant contributions to the cognitive psychology field, notably proposing that the human mind can hold 7 ± 2 pieces of information in short-term memory.

Maintenance Rehearsal

A cognitive process of repeatedly reviewing information to be retained in short-term memory and possibly encoded into long-term memory.

Short-term Memory

The capacity for holding a small amount of information in an active, readily available state for a short period.