If an MNC invests excess cash in a foreign county, it would like the foreign currency to ____; if an MNC issues bonds denominated in a foreign currency, it would like the foreign currency to ____.
A) appreciate; depreciate
B) appreciate; appreciate
C) depreciate; depreciate
D) depreciate; appreciate

Question

If an MNC invests excess cash in a foreign county, it would like the foreign currency to ____; if an MNC issues bonds denominated in a foreign currency, it would like the foreign currency to ____.​
A) ​appreciate; depreciate
B) ​appreciate; appreciate
C) ​depreciate; depreciate
D) ​depreciate; appreciate

Quizplus · Accepted Answer

When an MNC invests excess cash in a foreign country, it benefits from the foreign currency appreciating because the value of its investment increases when converted back to its home currency. Conversely, if an MNC issues bonds denominated in a foreign currency, it benefits from the foreign currency depreciating, as it will cost the company less in its home currency to repay the debt.

If an MNC Invests Excess Cash in a Foreign County