Question
natural hedging strategies can be used to reduce currency risk, including seeking to reduce the difference between receivables and payables. Which of the following scenarios
natural hedging strategies can be used to reduce currency risk, including seeking to reduce the difference between receivables and payables. Which of the following scenarios would not make natural hedging strategies less attractive for a corporation?
Group of answer choices
a- The company does not expect to continue doing business in other countries after this year.
b- The company is concerned about political risk if it moved more of its operations to certain countries where receivables are much higher than payables.
c- Moving operations to another country where receivables are far outpacing payables could save the company money because it has determined the costs would be reduced. In addition, those costs would be incurred in the local currency.
d- Moving operations to another country where receivables are far outpacing payables would result in five times the cost of maintaining the current structure and operations. In addition, those costs would be incurred in the local currency.
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