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Standard Financial Theory Advocates That MNCs Separate Their Financing and Investing

Question 44

Multiple Choice

Standard financial theory advocates that MNCs separate their financing and investing decisions:


A) so MNCs generally do consider decisions on where and how to invest separately from their decisions on how to finance their investments.
B) but MNCs,in particular,often reject this advice and take chances with currency exposure by combining investing and financing decisions.
C) but currency risk can require that firms considering financing opportunities with consideration of investment opportunities.
D) so MNCs often finance their capital needs in one currency and make their investments in another currency.

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