Multiple Choice:

Which of the following is likely to be the most effective hedge an MNC could use to hedge the possible sale of fixed assets held in a foreign country in the future?

a. The MNC should sell futures contracts.

b. The MNC should buy futures contracts.

c. The MNC should create an asset that matches the expected value of the assets at the point in the future when they may be sold.

d. The MNC should create a liability that matches the expected value of the assets at the point in the future when they may be sold.

e. The MNC should engage in a money market hedge.