Which of the Following Statements Is FALSE

question 40

Multiple Choice

Which of the following statements is FALSE?

• A)Many countries regulate or limit capital inflows or outflows,and many do not allow their currencies to be freely converted into dollars,thereby creating capital market segmentation.
• B)The existence of internationally integrated capital markets makes many decisions in international corporate finance more complicated but potentially more lucrative for a firm that is well positioned to exploit the market segmentation.
• C)Political,legal,social,and cultural characteristics that differ across countries may require compensation in the form of a country risk premium.
• D)Swaps allow firms to mitigate their exchange rate risk exposure between assets and liabilities,while still making investments and raising funds in the most attractive locales.

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Definitions:

Tax Bill

A tax bill is an official statement from a governmental authority specifying the amount of taxes owed by an individual or organization for a certain period.

Net Cash Flow

The amount of cash that is generated or lost by a business in a given period, after accounting for all cash inflows and outflows related to operational, investing, and financing activities.

Statement of Cash Flows

The statement of cash flows is a financial report that outlines the cash inflows and outflows from operating, investing, and financing activities, indicating how a company generates and uses cash.

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered but not yet paid for.