Porsche relies on currency hedging rather than price increases in order to:
A)boost pretax profits on sales of its automobiles.
B)balance the relative value of the dollar compared to the euro.
C)protect all earnings from foreign-exchange movements.
D)generate about 45% of its sales in the United States.
E)A, B, and C

Question

Quizplus · Accepted Answer

Porsche relies on currency hedging to achieve all three objectives mentioned in options A, B, and C. By using currency hedging, Porsche is able to protect its earnings from foreign exchange movements, balance the value of the dollar and euro, and boost pre-tax profits on sales of its automobiles. Furthermore, the company sells about 45% of its vehicles in the United States, making currency hedging an important aspect of its overall strategy to mitigate currency risk.

Porsche Relies on Currency Hedging Rather Than Price Increases in Order