Assume that an MNC has a subsidiary in Italy, which exports its products to various countries in Europe. Since all of the countries where it exports use Euro as their currency, this MNC is not subject to the exchange rate risk.

Question

Quizplus · Accepted Answer

Even though the countries where the MNC exports use Euro as their currency, there can still be exchange rate risk if the subsidiary needs to convert the Euro into another currency for its operations or if the exchange rate between Euro and other currencies fluctuates.

Assume That an MNC Has a Subsidiary in Italy, Which