If the domestic currency is strong or expected to become strong,

Multiple Choice

• a firm can choose to locate production facilities in a foreign country where costs are low due to either the undervalued currency or underpriced factors of production.
• a firm should curtail R&D efforts until the exchange rate situation improves.
• a firm should abandon international sales and focus on domestic market share.
• the firm should focus on profiting in the currency futures market based on its forecasts.