Which of the Following Is an Example of Risk in Capital

question 2

Multiple Choice

Which of the following is an example of risk in capital budgeting on a global basis?

• A)exchange rate changes
• B)tariff changes
• C)expropriation
• D)All of the above

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Definitions:

Effective Yield

A measure of the return on investment, taking into account the effect of compounding interest, unlike the nominal interest rate.

Floating-rate Debt

Debt instruments such as bonds or loans with variable interest rates that adjust periodically based on a benchmark interest rate or index.

Market Rates

Refers to the current interest rate or price available in the marketplace for financial instruments or commodities.

Floating-rate Debt

Floating-rate Debt refers to loans or bonds with a variable interest rate, which adjusts periodically based on a benchmark interest rate or index.