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problem1: (TCO G) Transaction exposure reflects:

[A]     the exposure of a firm financial statements to exchange rate fluctuations.

[B]     the exposure of a firm cash flows to exchange rate fluctuations.

[C]     the exposure of a firm ongoing international transactions to exchange rate fluctuations.

[D]     the exposure of a firm local currency value to transactions between foreign exchange traders. 

problem2: (TCO G) A U.S. MNC has the equivalent of 1 million dollar cash outflows in each of two highly negatively correlated currencies. During ____ dollar cycles, cash outflows are _____.

[A]      weak; favorably affected

[B]     weak; somewhat stable

[C]      weak; adversely affected

[D]     none of these

problem3: (TCO G) Your Company will receive C$600,000 in 90 days. The ninety day forward rate in the Canadian dollar is .80 dollars. If you use a forward hedge, you will:

[A]      Receive $480,000 today.

[B]     Receive $480,000 in 90 days.

[C]      Receive $750,000 today.

[D]      Receive $750,000 in 90 days.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M917691

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