A true MNC,with operations in dozens of different countries
A)must effectively manage foreign exchange risk.
B)can ignore foreign exchange risk since it is diversified.
C)will pay taxes in only its home county.
D)none of the options

Question

Quizplus · Accepted Answer

A true MNC, with operations in dozens of different countries, must effectively manage foreign exchange risk. This is because the company will be exposed to fluctuating exchange rates and currency movements, which can impact its financial performance and profitability. Effective management of foreign exchange risk may involve hedging strategies, such as using financial instruments to reduce exposure to currency fluctuations, or adopting natural hedging methods, such as aligning revenues and costs in the same currency. Ignoring foreign exchange risk can lead to significant financial losses for an MNC.

A True MNC,with Operations in Dozens of Different Countries