1) U.S. exporters may not necessarily benefit from a weaker dollar if

a) If foreign companies raise their prices

b) it will always benefit because exporter prefer a strong home currency

c) Foreign competitors will reduce their profit margins

d) If the U.S. company refuses to raise its export price

2) Laurel Co. is a U.S.-based company with US dollar costs and with revenues in euros and Swiss francs. Assume that the euro-franc exchange rate will remain quite stable. Hardy Co. is also U.S.-based, but has euro revenues and costs in Swiss francs, rather than in USD. Which firm has a higher exposure to exchange rate risk

a) Hardy

b)Neither firm has exchange rate risk

c) The firms have the same levels of exposure

d) Laurel

3) Transaction risk differs from economic risk in that:

a)You cannot hedge transaction risk, but can hedge economic risk

b)Transaction risk is real while economic risk is theoretical

c)Economic risk covers inflation and GDP growth while transaction risk is the chance a buyer won't pay its bill

d) Economic risk could require an adjustment to the business model while transaction risk is temporary