Generally Speaking, When Both a Firm's Costs and Its Price

question 9

Multiple Choice

Generally speaking, when both a firm's costs and its price is sensitive to exchange rate changes

• A)the firm is not subject to high degrees of operating exposure.
• B)the firm is subject to high degrees of operating exposure.
• C)the firm should hedge.
• D)none of the above

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Definitions:

Horizontal Line

A straight line with no slope, moving left to right parallel to the x-axis in Cartesian coordinates.

Slope-intercept Form

A way of writing linear equations using the formula \(y = mx + b\), where \(m\) is the slope of the line and \(b\) is the y-intercept.

Slope

The calculation of how steep or inclined a line is, determined by the ratio of its vertical shift to its horizontal shift between any two points on the line.

Inequality

A mathematical statement that uses inequality signs to compare two expressions, indicating that they are not equal and one has a greater or lesser value than the other.