If Cash Flows Are in Terms of Local Currency and the U.S

question 29

True/False

If cash flows are in terms of local currency and the U.S. Treasury bond rate is used to estimate the risk free rate, the analyst should add the expected inflation rate in the local country relative to that in the U.S. to convert the U.S. Treasury bond rate to a local country nominal rate.

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Definitions:

Alcoholic Beverages

Drinks containing ethanol, commonly known as alcohol, produced by the fermentation of grains, fruits, or other sources of sugar.

Proximity

The physical closeness or distance of objects or individuals, which can influence various psychological and sociological phenomena, including attraction and relationship formation.

Visual Perception

The ability to interpret the surrounding environment by processing information contained in visible light.

Interpersonal Attraction

The attraction between people which leads to friendships and romantic relationships, influenced by physical appearance, similarity, and other factors.