In General, MNCs Probably Prefer to Use ____ Foreign Debt

question 29

Multiple Choice

In general, MNCs probably prefer to use ____ foreign debt when their foreign subsidiaries are subject to ____ local interest rates.

• A)more; low
• B)more; high
• C)less; low
• D)B and C
• E)none of the above

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Definitions:

Compounded Quarterly

The process of adding interest to the principal sum of a loan or deposit, calculated every three months.

Mortality Table

A statistical table showing the rate of death at each age, used by insurers to calculate premiums and by actuaries for statistical assessments.

Life Insurance Policies

Contracts with an insurance company in which the company pays a designated beneficiary a sum of money upon the death of the insured person.

Annual Yield

The yearly return on an investment, expressed as a percentage of the investment's total cost.