A US-Based Multinational Corporation Has 100% Owned Subsidiary in Argentina

question 111

Multiple Choice

A U.S.-based multinational corporation has 100% owned subsidiary in Argentina.The subsidiary operates only domestically,that is,all transactions occur within Argentina.Therefore,the U.S.multinational corporation

• A) is exposed to translation risk only.
• B) is not exposed to exchange rate risk because the subsidiary operates 100% domestically.
• C) is exposed to both translation exposure and economic exposure.
• D) is most concerned with transactions exposure.