Which of the Following Statements Is FALSE

question 23

Multiple Choice

Which of the following statements is FALSE?

• A)Differential access to national capital markets is common enough that it provides the best explanation for the existence of currency swaps,which are like the interest rate swap contracts,but with the holder receiving coupons in one currency and paying coupons denominated in a different currency.
• B)Currency swaps generally also have final face value payments,also in different currencies.
• C)Using a currency swap,a firm can borrow in the market where it has the best access to capital,and then "swap" the coupon and principal payments to whichever currency it would prefer to make payments in.
• D)With differential access to national markets,to maximize shareholder value,the firm should raise capital in the foreign market;the method of valuing the foreign project as if it were a domestic project would then provide the correct NPV.

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Definitions:

Warehousing

The process of storing goods in a dedicated facility to ensure their availability for future distribution or sale.

Transportation Requirements

Specifications or conditions that need to be met for the movement of goods or people, including mode of transport, capacity, timing, and infrastructure needs.

Graphic Device

Hardware used to create, display, or manage visual content, such as a graphics card in a computer.

Uncertainty

The state of being unsure about the outcome of an event or the veracity of a fact.