One Argument for Exchange Rate Irrelevance Is That

question 56

Multiple Choice

One argument for exchange rate irrelevance is that:

• A) MNCs can hedge exchange rate exposure much more effectively than individual investors.
• B) diversified stakeholders will not be affected by exchange rate movements because of offsetting effects.
• C) purchasing power parity does not hold very well.
• D) MNCs are typically not diversified across numerous countries.