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 same amount of coupon or principal payments in the foreign currency.

If the Foreign Currency That Was Borrowed Appreciates Over Time