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:

Sale of Goods

The sale of goods is a commercial transaction where the ownership of tangible personal property is transferred from seller to buyer for a price.

Unilateral Contract

A contractual agreement in which one party makes a promise in return for an act by another party.

Offeror

The offeror is the party in a contract who presents the terms of the offer to another party for acceptance, potentially leading to an agreement.

Performance

In legal terms, performance refers to the act of completing the duties or fulfilling the obligations specified in a contract.