The foreign currency approach to capital budgeting analysis utilizes the uncovered interest parity relationship.

Question

Quizplus · Accepted Answer

The foreign currency approach to capital budgeting analysis does not primarily rely on the uncovered interest parity relationship; instead, it focuses on evaluating the cash flows from an investment in terms of the foreign currency and then converting those into the home currency at the expected exchange rates.

The Foreign Currency Approach to Capital Budgeting Analysis Utilizes the Uncovered