Which of the Following Is NOT Identified by Your Authors

question 8

Multiple Choice

Which of the following is NOT identified by your authors as a proactive management technique to reduce exposure to foreign exchange risk?

• A) matching currency cash flows
• B) cross-currency swaps
• C) remaining a purely domestic firm
• D) parallel loans

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Definitions:

Debt to Equity

A financial metric showing the comparative amount of debt and shareholders' equity utilized to fund a company's assets.

Price/Earnings

A valuation ratio of a company's current share price compared to its per-share earnings, used to assess if a stock is over or undervalued.

Ratio Analysis

A technique of analyzing the strength of a company by forming (financial) ratios out of sets of numbers from the financial statements. Ratios are compared with the competition, recent history, and the firm’s plan to assess the quality of its performance.

Stable Company

Refers to a firm with consistent performance, low volatility in its stock price, and predictable financial returns, making it a less risky investment.