​Mercury Co

question 53

Multiple Choice

​Mercury Co. has a subsidiary based in Italy and is exposed to translation exposure. Mercury forecasts that its earnings next year will be €10 million. Mercury decides to hedge the expected earnings by selling €10 million forward. During the next year, the euro appreciated. Mercury's consolidated earnings were ____ affected by the euro's movement, and Mercury's hedge position was ____ affected by the euro's movement.

• A) ​favorably; favorably
• B) ​favorably; adversely
• C) ​adversely; favorably
• D) ​adversely; adversely
• Answer Key

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Definitions:

Inhibitory Synapses

These are the connections between neurons that decrease the likelihood of the recipient neuron firing an action potential.

Endorphins

Natural chemicals in the brain that act as painkillers and mood enhancers, often released during exercise, excitement, pain, and sexual activity.

Rapidly

At a fast speed or in a short period of time.

Crack

A potent form of cocaine that is smoked to produce a rapid, intense high, often associated with severe addiction and negative health consequences.