When an MNC Finances with a Floating Rate Loan in a Currency

question 35

Multiple Choice

When an MNC finances with a floating rate loan in a currency that matches its long-term cash inflows, the MNC is exposed to ____ risk.

• A) interest rate
• B) credit
• C) exchange rate
• D) None of these are correct.

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Definitions:

Cytotoxic Activity

The quality of being toxic to cells, describing substances that inhibit or prevent the function of cells, leading to cell death.

Complex Natural Product

A compound derived from natural sources that has a complicated molecular structure.

Synthesis

The process of combining simpler substances chemically to form more complex substances, typically observed in chemical and materials science fields.

Methyl Vinyl Ketone

An organic compound with the formula CH2=CHCOCH3, utilized in the manufacture of polymers and organic synthesis.