MNCs Can Use ____ to Reduce Exchange Rate Risk

question 11

Multiple Choice

MNCs can use ____ to reduce exchange rate risk. This occurs when two parties provide simultaneous loans with an agreement to repay at a specified point in the future.

• A) forward contracts
• B) currency swaps
• C) parallel loans
• D) None of these are correct.

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Definitions:

Independent Events

Multiple events where the happening of one does not influence the likelihood of the other events happening.

P(A ∩ B)

P(A ∩ B) denotes the probability of the intersection of events A and B, meaning the probability that both A and B occur.

Occurrence

An event or incident that happens or takes place.

Experiment

A scientific procedure undertaken to make a discovery, test a hypothesis, or demonstrate a known fact.