Question
II. Which of the following is(are) considered as justifiable risk management practices? (Select all that apply) (2 marks) Select one or more:a. A U.S.-headquartered MNC
II. Which of the following is(are) considered as justifiable risk management practices? (Select all that apply) (2 marks)
Select one or more:a.
A U.S.-headquartered MNC expects to receive some euros in 6 months. It believes the euros will likely appreciate over these 6 months, and so it decides to enter a short 6-month EUR forward
b.
The CFO of a company announces any loss due to FX exposure will be less than 10,000 dollars based on the companys VAR calculations
c.
A U.S.-headquartered MNC with subsidiaries reporting in AUD, CAD, EUR, NZD, and CHF chooses to produce and sell locally within each individual market, and does not hedge with forwards or options
d.
A U.S.-headquartered MNC expects to pay a euro liability that matures in 6 months. It therefore borrows the present value of the euro amount required, and invest the amount at the ECB benchmark interest rate for 6 months
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