Which of the Following Is NOT an Acceptable Hedging Technique

question 6

Multiple Choice

Which of the following is NOT an acceptable hedging technique to reduce risk caused by a relatively predictable long-term foreign currency inflow of Japanese yen?

• A) Import raw materials from Japan denominated in yen to substitute for domestic suppliers.
• B) Pay suppliers from other countries in yen.
• C) Import raw materials from Japan denominated in dollars.
• D) Acquire debt denominated in yen.

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Definitions:

Short-term Performance

An evaluation of an entity's achievements or results over a brief period, typically focusing on metrics like quarterly earnings or monthly sales figures.

Long-term Performance

The extended period over which an entity or investment achieves its goals or demonstrates effectiveness, usually measured over years.

Firm

A business organization or enterprise, particularly one involving in professional or commercial activities.

Market Development Strategy

A business strategy that involves expanding the potential market through new users or new uses for a product.