1. In the analysis of the impact of cash flow and correlation conditions on an MNCs FX exposure, which of the following will result in the highest exposure considering the same amount in both currencies?

A). Net inflows in two currencies, which has a correlation of zero.

B). Net inflows in two currencies, which are highly correlated.

C). An inflow in one currency and an outflow in another currency, which are highly correlated.

D). An inflow in one currency and an outflow in another currency, which has correlation of zero.

2. Statement 1. The valuation model of an MNC shows that the MNC's value is favorably affected when its expected foreign cash inflows decrease. Statement 2. The valuation model of an MNC shows that the MNC's value is adversely affected when the MNC's required rate of return increases. Which of the following statements is/are accurate?

A) Statement 1 only

B). Statement 2 only

C). Both statements 1 and 2

D). Neither statement are accurate