Interest rate risks that a non-financial MNE faces can affect
A) the periodical levels of debt service.
B) the outstanding principal debt recognized as long term liability.
C) the outstanding amount of short term government securities recognized as an asset.
D) all of the above

Question

Quizplus · Accepted Answer

Interest rate risks can affect both the periodical levels of debt service (A) and the outstanding principal debt recognized as long term liability (B) for a non-financial MNE. Additionally, changes in interest rates can also impact the value of short term government securities held by the MNE, which would affect the outstanding amount recognized as an asset (C). Therefore, all of the above (D) are affected by interest rate risks.

Interest Rate Risks That a Non-Financial MNE Faces Can Affect