Although forward contracts may reduce translation exposure at the expense of increasing transaction exposure, they are sometimes used to hedge translation exposure.
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Q15: U.S. firms can attempt to hedge the
Q16: In general, it is more difficult to
Q17: U.S.-based MNCs invoicing in Asian currencies and
Q18: A limitation of hedging translation exposure is
Q19: The translation gain (or loss) is simply
Q21: To hedge translation exposure, MNCs could _
Q22: A U.S.-based MNC has a subsidiary in
Q23: Vermont Co. has foreign expenses denominated in
Q24: As opposed to transaction exposure, managing economic
Q25: It is generally least difficult to effectively
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