One Method of Analyzing a Foreign Investment Opportunity Is to Treat

question 33

Multiple Choice

One method of analyzing a foreign investment opportunity is to treat all risk as a single problem by adjusting the discount rate applicable.For countries with significant political and economic risks,the:

• A)discount rates are revised upward.
• B)discount rates are revised downward.
• C)early cash flows are not adjusted.
• D)distant cash flows are heavily penalized.

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Definitions:

Cognitive Bias

An organized tendency to deviate from normal or logical thinking in making judgments, leading to conclusions about people and situations that are drawn illogically.

Balanced Scorecard Framework

A strategic planning and management system used to align business activities with the vision and strategy of the organization, improve internal and external communications, and monitor organizational performance.

Strategic Initiatives

Long-term plans or actions taken by a business to achieve its goals and improve its competitive position.

CSR Efforts

Initiatives taken by a company to assess and take responsibility for its effects on environmental and social well-being, often going beyond compliance and engaging in actions that further social good.