Wisconsin, Inc. conducts business in Zambia. Years ago, Wisconsin established a subsidiary in Zambia that has consistently generated very large profits denominated in Zambian kwacha. Wisconsin wishes to restructure its operations to reduce economic exposure. Which of the following is not a feasible way of accomplishing this?

Question

Quizplus · Accepted Answer

Increasing Zambian sales would actually increase Wisconsin, Inc.'s economic exposure to Zambia rather than reduce it, as it would lead to higher revenue and potentially profits denominated in Zambian kwacha, increasing the company's sensitivity to changes in the exchange rate between the kwacha and its home currency.