The Foreign Subsidiary of a U

question 40

Multiple Choice

The foreign subsidiary of a U.S.firm is profitable when profits are measured in the foreign currency but those profits become losses when measured in U.S.dollars.This is an example of which one of the following?

• A)Interest rate disparities
• B)Short-run exposure to exchange rate risk
• C)Long-run exposure to exchange rate risk
• D)Political risk associated with the foreign operations
• E)Translation exposure to exchange rate risk

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Definitions:

Legal Permanent Residents

Individuals who have been granted the legal right to live indefinitely within a country without being its citizen.

Immigration and Nationality Act

A key piece of American legislation, enacted in 1952, that governs immigration and citizenship in the United States.

Vietnamese Youth

Young individuals of Vietnamese origin or descent.

American Indians

Refers to the indigenous peoples of the Americas, often specifically to those in the United States.