A multinational company may prefer to hold sizeable cash balances in one currency rather than another because

Question

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A multinational company may prefer to hold sizeable cash balances in one currency rather than another due to high interest rates existing in one country, which would increase the return on their cash holdings, or because one country's currency may be strong relative to the dollar, which would result in a higher dollar value for their cash holdings. Both of these factors could lead to a multinational company holding cash balances in a particular currency over others.

A Multinational Company May Prefer to Hold Sizeable Cash Balances