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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