Simulation is useful in the debt denomination decision since it can:

Question

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Simulation can help assess the probability that debt denominated in a foreign currency will be less costly than debt denominated in the home currency. While it may not be able to precisely compute the cost of financing with a portfolio of foreign currencies, it can provide a range of possible outcomes and help decision-makers assess the likelihood of different scenarios. Simulations can also factor in various market and economic conditions to give a more comprehensive picture of the potential costs and risks associated with different debt denomination decisions.

Simulation Is Useful in the Debt Denomination Decision Since It