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1 A U.S. firm has a European subsidiary that earns euros. The subsidiary has borrowed dollars at a floating rate of interest. What kind of

1 A U.S. firm has a European subsidiary that earns euros. The subsidiary has borrowed dollars at a floating rate of interest. What kind of risk(s) does the subsidiary have? Describe a risk management strategy the firm may choose to use in this scenario (there are multiple correct answers).

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