A negative effective financing rate indicates that a UK MNC:
A) paid only a small amount in interest over and above the amount borrowed.
B) has been negatively affected by a large appreciation of the foreign currency.
C) actually paid fewer pounds to repay the loan than it borrowed.
D) would have been better off borrowing in the UK.

Question

Quizplus · Accepted Answer

A negative effective financing rate means the MNC paid back less in pounds than it initially borrowed, often due to favorable currency exchange rate movements.

A Negative Effective Financing Rate Indicates That a UK MNC