Which of the following firms is not exposed to translation exposure?
A) Firm X, with a fully owned subsidiary that periodically remits earnings generated in Great Britain to the U.S.-based parent.
B) Firm Y, with a fully owned subsidiary that periodically generates foreign losses in Sweden. The parent covers at least some of these losses.
C) Firm Z, with a fully owned subsidiary that generates substantial earnings in Germany. The subsidiary never remits earnings but reinvests them in Germany.
D) All of these firms are exposed to translation exposure.
Correct Answer:
Verified
Q46: If revenues and costs are equally sensitive
Q47: Depreciation of the euro relative to the
Q48: A perfect hedge (full coverage) on translation
Q49: If a firm does not have foreign
Q50: Tennessee Co. conducts business in the United
Q52: If the Singapore dollar appreciates against the
Q53: Assume a U.S. firm uses a forward
Q54: Assume that Atlanta Co. is producing motorcycles
Q55: Which of the following is a possible
Q56: Springfield Co., based in the United States,
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents