A Firm Needs to Develop a Mechanism for Ensuring It

question 73

Multiple Choice

A firm needs to develop a mechanism for ensuring it maintains an appropriate mix of tactics and strategies for minimizing its foreign exchange exposure.Which of the following is true of the mechanism required?

• A)Firms should focus solely on managing transaction and translation exposures.
• B)Forecasting future exchange rate movements should be avoided as it is speculative.
• C)Firms need to develop strategies for dealing with economic exposure.
• D)Firms should avoid central control of exposure.

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