The Selection of International Borrowing Sources

Abstract

In the evaluation of investment opportunities risk is often a primary consideration. Risk is usually not a factor of such importance, however, in the evaluation of borrowing opportunities. But when the borrowing opportunities include the borrowing of foreign currencies, then the possibility of exchange rate fluctuations during the loan period may introduce a significant component of risk. It is our purpose to develop a method for evaluating and selecting international borrowing sources in the face of exchange rate uncertainties.