The first step for a manager in dealing with the currency exposure of an MNC is to:
A)determine whether the estimated level of currency risk warrants mitigations efforts.
B)determine what strategies to use to reduce or eliminate currency risks.
C)decide whether currency risks arise from transaction or operating exposures.
D)analyze the options that are available to the firm and estimate the cost of pursuing each option.

Question

Quizplus · Accepted Answer

Before any action is taken, it's important for the manager to determine whether the currency risk is significant enough to require action. This can be done by analyzing the estimated level of risk and comparing it to the company's risk tolerance and financial goals. Once the level of risk is determined, the manager can then move on to deciding how to address it.

The First Step for a Manager in Dealing with the Currency