When a foreign currency is perceived by a firm to be ____, the firm will probably ____ direct foreign investment in that country.
A) undervalued; consider
B) undervalued; not consider
C) overvalued; not consider
D) A and C
E) B and C

Question

Quizplus · Accepted Answer

When a foreign currency is undervalued, a firm may consider investing as it can acquire assets more cheaply. Conversely, if a currency is overvalued, the firm might avoid investing due to higher costs.

When a Foreign Currency Is Perceived by a Firm to Be