Which of the Following Did NOT Contribute to the Exchange

question 4

Multiple Choice

Which of the following did NOT contribute to the exchange rate collapse in emerging markets in the 1990s?

• A) infrastructure weaknesses
• B) speculation on the part of market participants
• C) the sharp reduction of cross-border foreign direct investment
• D) All of the above contributed to the emerging markets exchange rate collapse of the 1990s.

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Definitions:

Profitability Index (PI)

The profitability index is a ratio that calculates the present value of future cash flows from an investment divided by the investment's initial cost, used to assess the desirability of a project.

Internal Rate Of Return (IRR)

A financial metric used to estimate the profitability of potential investments, calculated as the discount rate that makes the net present value (NPV) of all cash flows equal to zero.

Discounted Payback

This refers to the period of time it takes to recoup an investment in terms of its discounted cash flows, taking the time value of money into account.

Payback

The period it takes for an investment to generate an amount of income or cash equivalent to the cost of the investment.