Consider the Position of a Treasurer of a MNC, Who

question 2

Multiple Choice

Consider the position of a treasurer of a MNC, who has $20,000,000 that his firm will not need for the next 90 days.

• A)He could borrow the $20,000,000 in the money market.
• B)He could take a long position in the Eurodollar futures contract.
• C)He could take a short position in the Eurodollar futures contract.
• D)None of the above

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Definitions:

Operating Activity

Transactions and events that affect net income, including all activities not categorized as investing or financing activities, typically related to the core operations of a business.

Investing Activity

Financial transactions involving the purchase or sale of long-term assets and investments.

Financing Activity

Transactions involving the flow of cash between a company and its investors and creditors, related to equity and debt.

Noncash Investing

Transactions that involve the acquisition or disposal of assets not involving immediate cash flow.