(8) While the strategic marketing and production adjustments occur over the long run, financial management may finance the firms operations such that shortfalls in cash flows during the adjustments are offset by a reduction in __________ expenses.

a. marketing

b. production

c. debt-servicing

d. hedging

(9) An importers financial market hedging alternatives include:

a. Sell the foreign currency with long-dated forward contracts.

b. Use currency swaps to acquire financial assets in the foreign currency.

c. Use a rolling hedge to repeatedly sell the foreign currency.

d. More than one of the above

(10) On March 1, Bechtel submits a euro denominated bid on a project in France. Bechtel will not learn until June 1 whether it has won the contract. What is the most appropriate way for Bechtel to manage the exchange risk on this contract?

a. sell the euro amount of the bid forward for U.S. dollars

b. buy euro forward in the amount of the contract

c. buy a put option on euro in the amount of the euro exposure

d. buy a call option on euro in the amount of euro exposure