Question
Assume a U.S. firm with continuous export sales to Korea. In order to compete effectively in Korean markets, the firm invoices all export sales in
Assume a U.S. firm with continuous export sales to Korea. In order to compete effectively in Korean markets, the firm invoices all export sales in Korean won. This policy results in a continuing receipt of Korean won month after month. The export sales are part of a continuing supplier relationship and thus the long Korean won position is relatively predictable and constant. Which of the following is NOT an acceptable hedging technique to offset operating exposure for the U.S. firm?
Group of answer choices
Import raw materials from Korea denominated in won to substitute for domestic suppliers.
Import raw materials from Korea denominated in dollars.
Acquire debt denominated in won.
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