Which of the following statements make the best argument for why firms should NOT hedge exchange rate risks?

Exchange rate risk is irrelevant because many multinational companies are similarly affected by exchange rate movements.

Exchange rate risk is irrelevant because stakeholders do not care about the financial distress risk that adverse effects of exchange rate movements may cause.

Exchange rate risk is irrelevant for multinational companies (MNCs) because an MNC generates cash flows in numerous currencies. The exchange rate movements of many currencies can easily, exactly offset each other.

Exchange rate risk is irrelevant because investors can hedge exchange rate risk on their own.

Exchange rate risk is irrelevant because it is extremely difficult to hedge exchange risks profitably.

Economic exposure measures _____________________.

the extent to which the value of the firm would be affected by unanticipated changes in exchange rate

the exposure of an MNCs contractual transactions to exchange rate movements.

the effect of unanticipated changes in exchange rates on the dollar value of contractual obligations denominated in a foreign currency

the effect of changes in exchange rates will have on the consolidated financial reports of an MNC

the sensitivity of realized domestic currency values of the firm's contractual cash flows denominated in foreign currencies to unexpected exchange rate changes