MNCs can forecast exchange rate volatility to determine the potential range surrounding their exchange rate forecast.

Question

Quizplus · Accepted Answer

MNCs can use various techniques such as statistical models and fundamental analysis to forecast exchange rates. Once they have a forecast, they can use options and other financial instruments to manage their currency exposure and determine the potential range of exchange rate movements that could impact their business operations and financial performance. Therefore, MNCs can forecast exchange rate volatility to determine the potential range surrounding their exchange rate forecast.

MNCs Can Forecast Exchange Rate Volatility to Determine the Potential