A foreign equity investment is preferred to a domestic equity investment if:
A) the expected percentage change in the exchange rate is greater than the domestic dividend yield.
B) the expected percentage change in the exchange rate is greater than the domestic rate of capital appreciation.
C) the foreign dividend yield is greater than the domestic dividend yield.
D) the expected percentage change in the exchange rate is greater than the sum of the dividend yield . and the rates of capital appreciation differentials.
Correct Answer:
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