Suppose a U

question 39

Multiple Choice

Suppose a U.S.-based MNC maintains a vacation home for employees in the British countryside and the local price of this property is always moving together with the pound price of the U.S.dollar.As a result,

• A)whenever the pound depreciates against the dollar,the local currency price of this property goes up by the same proportion.
• B)the firm is not exposed to currency risk even if the pound-dollar exchange rate fluctuates randomly.
• C)whenever the pound depreciates against the dollar,the local currency price of this property goes up by the same proportion.Additionally,the firm is not exposed to currency risk even if the pound-dollar exchange rate fluctuates randomly.
• D)none of the options

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Definitions:

Range Charts

A type of control chart used in statistical process control to monitor the dispersion or variability of a process.

X-bar Charts

A statistical tool used in quality control processes to monitor variations in the mean values of a process over time.

Average Outgoing Quality

The average quality level of units shipped to customers after defective units have been screened out or corrected.

Curve

A smoothly flowing, continuous line or surface that differs from a straight path by its direction gradually changing.