By increasing inventories before an imminent devaluation of a currency instead of holding cash,the corporation can reduce its exposure to devaluation losses.

Question

Quizplus · Accepted Answer

By increasing inventories before a devaluation, the corporation is effectively converting its cash into inventory, which may hold its value better during the devaluation. Therefore, this strategy can potentially reduce the corporation's exposure to devaluation losses.

By Increasing Inventories Before an Imminent Devaluation of a Currency