Which of the following firms would NOT bear risk caused by translation exposure?
A) A U.S based manufacturing firm with a fully owned subsidiary that generates earnings in Japan. The subsidiary always keeps and reinvests the earnings.
B) A U.S. based retailer with a fully owned subsidiary in Canada that generates losses in Canada that the parent firm occasionally covers.
C) A U.S. based firm with a subsidiary in Britain that occasionally remits earnings to the parent firm.
D) All of the above are subject to translation exposure.
Correct Answer:
Verified
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