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Firms typically prefer to invest in countries where the local currency is expected to strengthen against...

Firms typically prefer to invest in countries where the local currency is expected to strengthen against their own.

true or false?

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Answer #1

If a firm currently invest in a country whose local currency is weaker than their own they will have to spend less amount on the investment. Also, if the currency of the other country is expected to strengthen against our own, we will receive more in terms of our own currency when converting the profits at the end of the project. Hence, forms typically do prefer to invest in countries where the local currency is expected to strengthen against their own.

Answer - True

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