Which of the Following Statements Is False

question 41

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:

Deposit in Transit

Funds that have been deposited by a company in its bank account but have not yet been recorded by the bank, leading to a timing difference in the company's accounting records.

NSF Notation

A notation made by banks on a bounced check indicating "non-sufficient funds," meaning the account does not have enough money to cover the check.

Service Charge

Fees charged to customers for specific services or as penalties for not meeting certain criteria.

Note Receivable

A financial asset representing a promise to receive a definite amount of money at one or more specified future dates.