The Variance in Financing Costs Over Time Is ____ for Foreign

question 41

Multiple Choice

The variance in financing costs over time is ____ for foreign financing than domestic financing. The variance when financing with foreign currencies is lower when those currencies exhibit ____ correlations, assuming the firm has no other business in those currencies.

• A) lower; low
• B) lower; high
• C) higher; high
• D) higher; low

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Definitions:

Total Cost

The sum of fixed costs and variable costs incurred by a business in producing a particular level of output.

Industry Equilibrium Price

The price at which the total quantity demanded by consumers equals the total quantity supplied by firms in an industry.

Perfectly Elastic

A situation in demand or supply where quantity demanded or supplied changes infinitely with any change in price.

Marginal Revenue

The additional income received from selling one more unit of a good or service. It is an important concept in microeconomics and business when determining the optimal level of sales and production.