Not All Countries Allow MNCs the Freedom to Net Payments

question 96

Multiple Choice

Not all countries allow MNCs the freedom to net payments,

• A)by limiting netting, more needless foreign exchange transactions flow through the local banking system.
• B)MNCs can avoid these restrictions by using a Centralized Cash Depository.
• C)MNCs can avoid these restrictions by using wire transfers.
• D)both b and c

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Definitions:

Dividend

A portion of a company's earnings that is paid to shareholders, typically on a quarterly basis, as a reward for investing in the company.

Share

A unit of ownership interest in a corporation or financial asset that gives the holder a claim on part of the corporation's assets and earnings.

Sharpe Measure

A ratio used to evaluate the risk-adjusted return of an investment, calculated by subtracting the risk-free rate from the return of the investment and dividing by the standard deviation of the investment's returns.

Risk-Free Return

The theoretical return on an investment with zero risk, typically associated with government bonds.