Consider a U

question 18

Multiple Choice

Consider a U.S.-based MNC with a wholly-owned French subsidiary.Following a depreciation of the dollar against the euro,which of the following best describes the mechanism of any effect of the depreciation?

• A)The change in the cash flow in euro due an alteration in the firm's competitive position in the marketplace is in part a function of the elasticity of demand for the firm's product.
• B)A given operating cash flow in euro will be translated to a higher U.S.dollar cash flow regardless of the firm's hedging program.
• C)The change in the cash flow in euro due an alteration in the firm's competitive position in the marketplace is in part a function of the elasticity of demand for the firm's product,and a given operating cash flow in euro will be translated to a higher U.S.dollar cash flow regardless of the firm's hedging program.
• D)none of the options

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