1. The Capital Asset Pricing Model (CAPM) shows that the expected return for a particular asset depends on all of the following, except:

A) The return on a risk-less asset

B) The amount of systematic risk

C) The reward for bearing systematic risk

D) The pure time value of money

2. The best way to hedge economic exposure is to

A. Hedge each and every foreign-curreny cash flow

B. Invoice receivables and payables in the home currency

C. Use the reporting currency as the functional currency for all affiliates

D. Match up foreign currency inflows and outflows