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Your employer, a large MNC , has asked you to assess its transaction exposure. Its projected cash flows are as follows for the next year.
Your employer, a large MNC has asked you to assess its transaction exposure. Its projected cash flows are as follows for the next year. Danish krone inflows equal DK
while outflows equal DK British pound inflows equal while outflows equal The spot rate of the krone is $ while the spot rate of the pound
is $ Assume that the movements in the Danish krone and the British pound are highly correlated. Provide your assessment as to your firm's degree of transaction exposure
as to whether the exposure is high or low Substantiate your answer. Use a minus sign to enter a negative value, if any. Round your answers for net inflows to the nearest whole
number and for values of exposure to the nearest dollar.
The krone exposure shows Select net inflow, the pound exposure shows Select net inflow. Thus, their exposure should be Select if their exchange rates against the
US dollar continue to be highly correlated.
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