Which One of the Following Would NOT Be an Appropriate

question 14

Multiple Choice

Which one of the following would NOT be an appropriate response for a U.S.exporter to appreciation of the dollar?

• A)raise the foreign currency price if the dollar appreciation was expected to be temporary and the cost of regaining market share was minimal
• B)move some production offshore if the appreciation were expected to persist for an extended period
• C)keep the foreign currency price constant if demand is quite elastic
• D)lower the foreign currency price if demand is inelastic for the product

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Definitions:

Dividend

The payment made by a corporation to an equity investor (stockholder).

Cost of Equity

The return a company requires to decide if an investment meets capital return requirements, often used in capital budgeting to evaluate potential investments.

After-tax Cost

The cost of an investment or expense after deducting the tax advantages, reflecting the actual financial impact on an individual or company.

Coupon Bonds

Bonds that pay the holder a fixed interest rate (the coupon) over a specified period, typically until maturity when the principal, or face value, is repaid.