Consider a U Ignoring Transaction Exposure in the Yen,the Translation Exposure Will Indicate

question 76

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: $$\begin{array} { l l l } \text { Exposed assets } & \text { ¥ } & 700,000,000 \\\text { Exposed liabilities } & \text { ¥ } & 500,000,000\end{array}$$ Ignoring transaction exposure in the yen,the translation exposure will indicate a possible need for a "derivatives hedge" of

• A)short position in ¥200,000,000 currency futures.
• B)long position in ¥200,000,000 currency futures.
• C)either short position in ¥200,000,000 currency futures or long position in ¥200,000,000 currency futures.
• D)none of the options

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A type of cancer that occurs in the cells of the cervix, often associated with infection by Human Papillomavirus (HPV).

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