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Pissarides has a subsidiary that sells its products in Brazil with the sales invoiced in real. Pissarides required return on projects similar to the subsidiary
Pissarides has a subsidiary that sells its products in Brazil with the sales invoiced in real. Pissarides required return on projects similar to the subsidiary is The subsidiary can borrow at The subsidiary needs additional financing. If the goal is to reduce foreign exchange rate risk, should the subsidiary borrow in real or should Pissarides provide the additional financing? Explain.
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