Multinational firms can reduce the risk of exchange rate changes between the time a sale is made and the time a receivable is collected without cost by hedging.

Name: Multinational firms can reduce the risk of exchange rate changes between the time a sale is made and the time a receivable is collected without cost by hedging.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Hedging against exchange rate risk often involves financial instruments such as futures, options, or forwards, which come with a cost, including premiums or transaction fees.

Multinational Firms Can Reduce the Risk of Exchange Rate Changes