Fluctuating Exchange Rates Can Alter a Multinational Firm's Profits and Losses.German

question 107

Multiple Choice

Fluctuating exchange rates can alter a multinational firm's profits and losses.German company Bayer produces products in Germany and sells them in the United States.If the dollar depreciates against the euro,then Bayer's sales in the United States should ________ because it will take ________ U.S.dollars to purchase the German-made products.

• A)rise; more
• B)rise; fewer
• C)fall; more
• D)fall; fewer

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Definitions:

Standard Deviation

A statistical index that measures how much data values deviate from each other within a dataset.

Beta Coefficient

A measure of a stock's volatility in relation to the overall market; a higher beta indicates greater volatility.

Portfolio

A range of investments held by a person or organization, diversified across asset classes, instruments, or sectors, to manage risk and return.

CAPM

Capital Asset Pricing Model; a model that describes the relationship between systematic risk and expected return for assets, particularly stocks.