Which of the Following Is NOT a Method for Incorporating

question 17

Multiple Choice

Which of the following is NOT a method for incorporating the additional political and economic risk into foreign investment analysis?

• A)shortening the minimum payback period,
• B)raising the required rate of return of the investment
• C)adjusting cash flows to reflect the specific impact of a given risk
• D)hedging the expected risk of currency fluctuations with currency futures

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Definitions:

Unfunded Liabilities

Future retirement benefits and other obligations not covered by assets or financial reserves, often discussed in the context of pension plans.

Notes

Short-term or medium-term debt obligations issued by companies or governments.

Floating-Rate Bonds

Bonds with variable interest rates that adjust periodically based on a benchmark or index rate.

Future Interest Rates

Future interest rates refer to the anticipated rates at which borrowers will be charged for loans or the return investors will earn on deposits, based on predictions.