Laketown Co

question 6

Multiple Choice

Laketown Co. has some expenses and revenue in euros. If its expenses are more sensitive to exchange rate movements than its revenue is, it could reduce economic exposure by ____. If its revenues are more sensitive than its expenses, it could reduce economic exposure by ____.

• A) decreasing foreign revenues; decreasing foreign expenses
• B) decreasing foreign revenues; increasing foreign expenses
• C) increasing foreign revenues; decreasing foreign revenues
• D) decreasing foreign expenses; increasing foreign revenues