Nestlé Wishes to Obtain a Loan Denominated in Swiss Francs

question 20

Multiple Choice

Nestlé wishes to obtain a loan denominated in Swiss francs but considers the U.S.market to offer better terms.How can Nestlé accomplish this?

• A)Borrow francs in Switzerland, exchange for dollars and arrange a currency swap
• B)Borrow francs in Switzerland, exchange for dollars and arrange an interest-rate swap
• C)Borrow dollars in U.S., exchange for francs and arrange an interest-rate swap
• D)Borrow dollars in U.S., exchange for francs and arrange a currency swap

---

Definitions:

Dominant Strategy

In game theory, a strategy that is best for a player, regardless of the strategies chosen by other players.

Nash Equilibria

A concept in game theory where no participant can gain by unilaterally changing their strategy if the strategies of others remain unchanged.

Maximin Strategy

In decision-making and game theory, a strategy which maximizes the minimum gain that can be achieved, focusing on the most favorable outcome of the worst possible scenarios.

Entry-Deterrence

Strategies employed by existing firms in a market to prevent or discourage new competitors from entering the market.