--%>
Assignment Help - homework help

Exchange rate changes decreases risk of foreign investment

Would exchange rate changes always raise the risk of the foreign investment? Explain some of the condition under which exchange rate changes can actually decrease the risk of foreign investment.

E

Expert

Verified

Changes of exchange rate need not always increases the risk of foreign investment. When covariance between exchange rate changes and local market returns is sufficiently negative to offset the positive variance of exchange rate changes, exchange rate volatility may actually decrease the risk of foreign investment.

   Related Questions in Financial Accounting

  • Q : Relative and absolute purchasing power

    Explain about the purchasing power parity, both the relative and absolute versions. List the things which results in the deviations from purchasing power parity?

    		•
  • Q : Avoidable Interest The book says

    The book says "avoidable interest is the amount of interest cost during the period that a company could theoretically avoid if it had not made expenditures for the asset." This makes it sound like avoidable interest is the total amount of interest paid for an asset. I know it's not but I was wonder

    		•
  • Q : Screening of Elder Abuse What is the

    What is the aim of the research in the screening of elderly abuse at the primary health care level ?

    		•
  • Q : Matlab Applications in Control System

    Student faces a lot of difficulties in Matlab control system assignments and topics. If you are also having same issues and problems then www.tutorsglobe.com is the best available solution for you. We have highly skilled and experienced tu

    		•
  • Q : Calculation Of IRR Calculation Of IRR :

    Calculation Of IRR: IRR is the rate at which your discounted cash inflow becomes equal to your discounted cash outflow. In other words NPV=0. To determine this following steps are followed:- 1. Determine cash inflo

    		•
  • Q : Explain Agricultural business Explain

    Explain the term Agricultural business in term of Accounting?

    		•
  • Q : What do you mean by the term Entry What

    What do you mean by the term Entry in Accountancy?

    		•
  • Q : State Net Profit State Net Profit in

    State Net Profit in brief?

    		•
  • Q : Maintaining the fixed exchange rate

    Explain why “Once  the capital markets are integrated, it becomes difficult for the country in order to maintain the fixed exchange rate”. 

    		•
  • Q : Meaning of Goodwill Meaning of Goodwill

    Meaning of Goodwill: Goodwill puts the association at a good position due to which the organization is capable to earn huge profits without any additional efforts. Goodwill can’t be seen although felt. Thus goodwill is termed as an Intangible as

    		•