Which of the following is an example of economic exposure but not an example of transaction exposure?
A) An increase in the dollar's value hurts a U.S. firm's domestic sales because foreign competitors are able to increase their sales to U.S. customers.
B) An increase in the pound's value increases the U.S. firm's cost of British pound payables.
C) A decrease in the peso's value decreases a U.S. firm's dollar value of peso receivables.
D) A decrease in the Swiss franc's value decreases the dollar value of interest payments on a Swiss deposit sent to a U.S. firm by a Swiss bank.
Correct Answer:
Verified
Q7: It is generally least difficult to effectively
Q8: Assume that a Japanese car manufacturer exports
Q9: Which of the following firms is not
Q10: Depreciation of the euro relative to the
Q11: If a U.S. firm's expenses are more
Q13: An effective way for an MNC to
Q14: Assume a U.S. firm uses a forward
Q15: Springfield Co., based in the U.S., has
Q16: _ represents any impact of exchange rate
Q17: If a firm does not have foreign
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