Which of the Statements A) Through C) Regarding the Currency

question 14

Multiple Choice

Which of the statements a) through c) regarding the currency risk exposure of large multinational corporations is FALSE?

• A) Multinational corporations are likely to be exposed to currency risk.
• B) Investors will prefer that managers hedge currency risk if the firm's expected future cash flows can be increased through hedging.
• C) Managers have little need to hedge exposures to currency risks that are diversifiable from the shareholders' perspective.
• D) Two of the above are false.
• E) Each of the statements is true.

---

Definitions:

Positive Relationship

An interaction between individuals characterized by mutual respect, cooperation, support, and the absence of conflict or negativity.

Identification

The process of associating oneself with particular groups, ideas, or qualities, leading to a sense of belonging or affinity.

Informal Systems

Unofficial, non-structured methods through which information is shared and activities are conducted within an organization, contrasting with formal policies and procedures.

Everyday Activities

Routine actions or tasks that are performed on a daily basis as part of normal life.