Why would a rise in interest rates adversely affect MNCs that produce durable goods?
A) A rise in interest rates increases the cost that consumers of those durable goods have to pay and,therefore,reduces the demand for those durable goods.
B) A rise in interest rates causes the value of the domestic currency to decrease,making the cost of the durable goods worldwide more expensive.
C) A rise in interest rates indicates economic disruption in the country and makes it more difficult for MNCs to sell their products worldwide.
D) A rise in interest rates signals the MNCs inability to continue to produce at the level it has been producing,and lower product means lower profits.
Correct Answer:
Verified
Q14: _ comprise the great majority of derivatives
Q15: The nominal value of a forward contract
Q16: Call options are similar to forwards because
Q17: Derivative contracts that can be traded after
Q18: Put options allow the long the opportunity
Q20: If counterparties agree that one currency can
Q21: If a long counterparty has the right
Q22: Differences between future prices on one market
Q23: From a cash flow standpoint,the difference between
Q24: The counterparty risk in forward contracts:
A)means that
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents