When a firm perceives that a foreign currency is ____, the firm may attempt direct foreign investment in that country, as the initial outlay should be relatively ____.
A) overvalued; high
B) overvalued; low
C) undervalued; high
D) undervalued; low

Question

Quizplus · Accepted Answer

When a foreign currency is undervalued, the initial outlay for direct foreign investment in that country should be relatively low. This makes it an attractive option for firms looking to invest in other countries.

When a Firm Perceives That a Foreign Currency Is ____