U.S. firms can attempt to hedge the translation exposure of their European subsidiaries with a forward purchase of euros.
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Q10: A foreign subsidiary with expenses that are
Q11: Transaction exposure results when an MNC translates
Q12: All MNCs are subject to transaction exposure.
Q13: All MNCs are subject to translation exposure.
Q14: Hedging translation exposure with forward contracts can
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
Q20: Although forward contracts may reduce translation exposure
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