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The Home Currency Approach

Question 52

Multiple Choice

The home currency approach:


A) generally produces more reliable results than those found using the foreign currency approach.
B) requires an applicable exchange rate for every time period for which there is a cash flow.
C) uses the current risk-free nominal rate to discount all the cash flows related to a project.
D) stresses the use of the real rate of return to compute the net present value (NPV) of a project.
E) converts the foreign-denominated NPV into the dollar-denominated NPV.

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