Tools That Multinationals Can Use to Help Them Reduce the Risks

question 18

Multiple Choice

Tools that multinationals can use to help them reduce the risks inherent in making investments in foreign countries include:

• A) options.
• B) hedges.
• C) swaps.
• D) All of the options are tools that multinationals can use to help them reduce the risks inherent in making investments in foreign countries.

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Definitions:

Special Order

An order for goods or services that is outside the company's normal production or service delivery operations.

Split-off Point

In process costing, the stage in production where multiple products emerge from a single process and continue to be processed further or sold as is.

Joint Production Costs

Costs that are incurred up to the split-off point in a process that produces multiple products.

Absorption Costing

This accounting style integrates all facets of manufacturing costs—direct materials, direct labor, and both variable and fixed overheads—into the comprehensive cost of a product.