The Foreign Subsidiary of a U

question 40

Multiple Choice

The foreign subsidiary of a U.S.firm is profitable when profits are measured in the foreign currency but those profits become losses when measured in U.S.dollars.This is an example of which one of the following?

• A)Interest rate disparities
• B)Short-run exposure to exchange rate risk
• C)Long-run exposure to exchange rate risk
• D)Political risk associated with the foreign operations
• E)Translation exposure to exchange rate risk

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Definitions:

Reinforcement

In behavioral psychology, a process that increases the likelihood of a behavior being repeated through positive or negative stimuli.

Novel Sentences

Sentences that are newly created or original, not derived from previously existing sentences or texts, showcasing the creative aspect of human language use.

Proficient

Having advanced skills or expertise in a particular area or field, showing a high level of competence.

Imitation

The action of using someone or something as a model and attempting to replicate their behavior or actions.