Which One of the Following Management Techniques Is Likely to Best

question 17

Multiple Choice

Which one of the following management techniques is likely to best offset the risk of long-run exposure to receivables denominated in a particular foreign currency?

• A) Borrow money in the foreign currency in question.
• B) Lend money in the foreign currency in question.
• C) Increase sales to that country.
• D) Increase sales in this country.

---

Definitions:

Money Market Securities

Short-term financial instruments, typically with high liquidity and low risk, such as Treasury bills and commercial paper.

Cash Equivalents

Temporary investments with high liquidity that can be quickly converted into precise cash amounts and carry minimal risk of fluctuating in value.

Marketable

Refers to assets or securities that are easily bought or sold in the market because of their high demand, liquidity, or both.

Bid Price

The highest price a buyer is willing to pay for a security or asset.