A French company wants to invest 20 million euros for three months.The company found that investing in a Thai money market account would give it a higher interest rate than domestic investments.Which of the following is true about this investment?
A) The investment is risk-free because money market investments are considered to be equivalent to bank deposits.
B) The investment is not risk-free because foreign currency movements in the intervening period can affect the profitability of the firm.
C) The investment is risk-free because such investments also lock foreign exchange rates for the duration of the investment.
D) The investment is not risk-free because money market instruments are considered to be the most speculative of all investments.
E) The investment is risk-free because the Thai money market is considered to be more stable and secure than other markets.
Correct Answer:
Verified
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