An MNE Has a Contract for a Relatively Predictable Long-Term

question 2

Multiple Choice

An MNE has a contract for a relatively predictable long-term inflow of Japanese yen that the firm chooses to hedge by seeking out potential suppliers in Japan. This hedging strategy is referred to as:

• A) a natural hedge.
• B) currency-switching.
• C) matching.
• D) diversification.

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Definitions:

Behaviour

The way an individual acts or responds when faced with external or internal triggers.

Anger

A strong feeling of displeasure or hostility, often arising in response to perceived wrong or injustice.

Adrenocorticotropic Hormone

A hormone produced by the pituitary gland that stimulates the adrenal cortex to secrete cortisol and other hormones.

Adrenal Cortex

The outer portion of the adrenal gland that produces steroid hormones which regulate carbohydrate and fat metabolism, as well as mineralocorticoids that regulate salt and water balance in the body.