The Home Currency Approach

question 67

Multiple Choice

The home currency approach:

• A)discounts all of a project's foreign cash flows using the current spot rate.
• B)employs uncovered interest parity to project future exchange rates.
• C)computes the net present value (NPV) of a project in the foreign currency and then converts that NPV into U.S. dollars.
• D)utilizes the international Fisher effect to compute the NPV of foreign cash flows in the foreign currency.
• E)utilizes the international Fisher effect to compute the relevant exchange rates needed to compute the NPV of foreign cash flows in U.S. dollars.

---

Definitions:

Transformational Leaders

Leaders who inspire and motivate their followers by presenting a compelling vision of the future, fostering an environment of intellectual stimulation, and demonstrating personal attention to each member's needs and development.

Consideration

The thoughtfulness and sensitivity shown towards others, often part of leadership qualities that include respect and empathy.

Employees

Individuals who are hired by a company or organization to perform specific duties in exchange for payment.

LMX

Leader-Member Exchange, a theory focusing on the two-way relationship between supervisors and subordinates, emphasizing dyadic relationships.