Consider a U

question 4

Multiple Choice

Consider a U.S.-based MNC with manufacturing activities in Japan.The result of a change in the ¥-$ exchange rate on the assets and liabilities of the consolidated balance sheet is: Ignoring transaction exposure in the yen,the translation exposure will indicate a possible need for a "balance sheet hedge" of

• A)¥200,000,000 more liabilities denominated in yen.
• B)¥200,000,000 less assets denominated in yen.
• C)both a) or b)
• D)none of the above

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Definitions:

Firm's Output

The total quantity of goods and services produced by a company during a specific period.

Short Run

A timeframe in economics during which at least one factor of production is fixed, allowing only some variables to change in response to changes in demand or other influences.

Long Run

An economic interval where all production elements and expenses can fully adapt, as they are changeable, permitting comprehensive adjustments to any variations.

Short Run

A period in economic analysis where at least one production factor is fixed, limiting the ability of the economy or business to adjust immediately.