True or False ?

T F 2. One goal of foreign exchange rate protection is to minimize foreign exchange rate management costs. T F 3. A forward contract is an example of a balance sheet hedge. T F 4. Varying the leasing currency is an example of an operational hedge. T F 5. If the expected Loss from not hedging is greater than the cost of forward cover, the firm should hedge. T F 6. One reason that multinational firms make foreign direct investments is to acquire access to raw materials. T F 7. One reason for market segmentation is differences in GAAP in different countries. T F 8. Information asymmetry is on reason for increased risk for multinational investments. T F 9. Differences in capital structure for companies in different countries is one reason that companies in different countries may have different costs of capital. T F 10. Political risk results from changes in the economic and financial environment that may reduce the overall value of the firm's business activities. T F 11. One way to avoid political risk is the avoid making investments overseas