Question 10 1 pts Which of the following statement is FALSE? O Investing in green initiatives can be an effective strategy for domestic hrms to deploy to build customer loyalty in face of growing foreign competition. Economic exposure is the sensitivity of the future home currency value of the firm's assets and liabilities and the firm's operating cash flow to random changes in exchange rates. O Firms whose expenses are more sensitive to exchange rates than their revenue are most concerned that their home currency will depreciate against foreign currencies O While diversifying production locations can mitigate the effect of exchange rate movements, the downside is that it can be a costly strategy to execute. O Empirical research shows a positive relation between a country's geopolitical risk and foreign direct investment in that country. 1 pts Question 11 A purely domestic firm that sources and sells only domestically O faces no exchange rate risk O should never hedge FX risks since this could actually increase its currency exposure O faces exchange rate risk to the extent that it has international competitors in the domestic market O should never hedge FX risks unless the firm is able to pass on exchange rate risk to its customers