Which of the following is probably not a scenario under which a U.S.-based MNC would consider short-term foreign financing?
A) Canadian dollars offer a lower interest rate than available in the U.S. and are expected to appreciate over the maturity of the loan.
B) Australian dollars offer a lower interest rate than available in the U.S. and are expected to depreciate over the maturity of the loan.
C) A U.S. firms has net receivables in Cyprus pounds.
D) A and C.
E) None of the above

Question

Quizplus · Accepted Answer

If Canadian dollars are expected to appreciate, the cost of repaying the loan could increase, making it an unfavorable scenario for short-term foreign financing.

Which of the Following Is Probably Not a Scenario Under