Multiple Choice
Country risk included in the risk premium in interest rates refers to the:
A) additional costs incurred when loans are made in currencies other than the domestic currency.
B) possibility that loans in some countries may not be repaid because of political upheaval.
C) expectation that the exchange rate may change in the future.
D) potential change in the terms of trade between countries.
Correct Answer:
Verified
Correct Answer:
Verified
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