If the foreign currency that was borrowed appreciates over time, an MNC will need fewer funds to cover the coupon or principal payments. [Assume the MNC has no other cash flows in that currency.]

Question

Quizplus · Accepted Answer

If the foreign currency appreciates, the MNC will need more funds in its home currency to cover the coupon or principal payments, as the foreign currency becomes more expensive.

If the Foreign Currency That Was Borrowed Appreciates Over Time