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

question 26

Multiple Choice

An MNE has a contract for a relatively predictable long-term inflow of Japanese yen that the firm chooses to hedge by paying for imports from Canada in Japanese yen. This hedging strategy is known as:

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

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Definitions:

Mutual Adjustment

The process by which individuals or groups modify their actions and behaviors in response to others to achieve coordination and harmony.

Formal Communication

The exchange of information through officially designated channels and structures within an organization.

Written Rules

Explicitly documented guidelines or procedures that govern behavior and operations within an organization or society.

Mutual Adjustment

A process of coordination where individuals or groups modify their actions based on interactions with others, to achieve a common goal or maintain harmony.