You Are Importing TV Sets Worth ¥10,000,000 from a Japanese

question 52

Multiple Choice

You are importing TV sets worth ¥10,000,000 from a Japanese manufacturer,and this amount is payable after 6 months.You can hedge your exchange risk by:

• A) buying Japanese yen in the forward market.
• B) selling Japanese yen in the forward market.
• C) borrowing Japanese yen.
• D) doing nothing.

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Definitions:

Hostile Takeover

An acquisition attempt by a company or individual without the consent or cooperation of the target company's board of directors.

Investment Banking Firm

An establishment engaged in finance that helps people, businesses, and government bodies acquire funds by underwriting or serving as the representative of the client in the release of securities.

Defensive Strategy

A business approach aimed at protecting the existing market share, products, and profitability against competitors' actions.

Congeneric Merger

Involves firms that are interrelated but that do not have identical lines of business. One example is Advanced Micro Devices' acquisition of ATI Technologies.