20. Which of the following statements is incorrect?

A)The London Interbank Offer Rate, or LIBOR, is also commonly used as the base rate for Eurodollar loans other than those between two banks.

B)The forward rate is what you agree to pay for the currency in the future by signing a contract today to buy the currency on a date in the future.

C)Country risk has no effect on a firm's cash flows.

D)All the answers are correct except one.

E)The spot rate is the cost of buying a foreign currency today, on the spot.

22. Which of the following statements is correct?

a) When the British pounds become more expensive in relation to dollars, British products become less expensive for Americans to buy.

b) All the answers are correct.

c) With the international capital budgeting, the decision to accept international projects with a negative NPV increases the value of the firm and is consistent with the fundamental goal of financial management, which is to maximize the sales.

d) The European or indirect quote shows the amount of foreign currency per U.S. dollar.

e) The ask quote represents the rate at which the dealer will buy foreign currency from you.