Suppose Your Firm Invests $100,000 in a Project in Italy

question 30

Multiple Choice

Suppose your firm invests $100,000 in a project in Italy.At the time the exchange rate is $1.25 = €1.00.One year later the exchange rate is the same,but the Italian government has expropriated your firm's assets paying only €80,000 in compensation.This is an example of

• A)exchange rate risk.
• B)political risk.
• C)market imperfections.
• D)none of the options,since $100,000 = €80,000 × $1.25/€1.00.

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Definitions:

Morally Right

Actions or behaviors that are consistent with ethical principles and are considered justifiable and good.

Final Goal

The ultimate objective or ambition that an individual, group, or organization is striving to achieve.

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Activities that are conducted in accordance with moral and ethical virtues, promoting character and moral goodness.

Excellence

The quality of being outstanding or extremely good in some respect, often achieved through hard work and dedication.