Which of the following statements is true about multinational working capital management?

Question

Quizplus · Accepted Answer

Exchange rate changes can affect the credit policies of multinational companies, as they may need to adjust their financing and hedging strategies to mitigate currency risk.

B, C, D, and E are all false statements. Foreign governments typically encourage capital to stay in their countries to fuel economic growth, rather than being taken out. Inventory holdings are not necessarily maximized in the face of the probability of expropriation. Multinational corporations often prefer banking with global banks that have a presence in multiple countries to facilitate cross-border transactions. The political and legal environments of foreign countries may make it more difficult to collect on defaulted accounts.

Which of the Following Statements Is True About Multinational Working