​A Firm Without Any Exposure to Foreign Exchange Rates Would

question 3

Multiple Choice

​A firm without any exposure to foreign exchange rates would likely increase this exposure the most by:

• A) ​borrowing domestically.
• B) ​borrowing a portfolio of foreign currencies that are not highly correlated.
• C) ​borrowing a portfolio of foreign currencies that are highly correlated.
• D) ​borrowing two foreign currencies that are negatively correlated.

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Definitions:

Just-In-Time (JIT) Inventory Systems

A supply chain management strategy that aims to reduce inventory costs by receiving goods only as they are needed in the production process.

Transportation Management

The planning, execution, and oversight of moving goods and services from origin to destination efficiently and effectively.

Value Chain Optimization

The process of increasing the efficiency and effectiveness of a value chain, involving activities that add value to a product or service from its conception to delivery to the consumer.

Logistics

The detailed coordination and implementation of complex operations, often referring to the movement and storage of goods from point of origin to point of consumption.