Suppose a U

question 78

Multiple Choice

Suppose a U.S.firm builds a factory in China, staffs it with Chinese workers, uses materials supplied by Chinese companies, and finances the entire operation with a loan from a Chinese bank located in the same town as the factory.This firm is most likely trying to greatly reduce, or eliminate, which one of the following?

• A)Interest rate disparities
• B)Short-run exposure to exchange rate risk
• C)Long-run exposure to exchange rate risk
• D)Political risk associated with the foreign operations
• E)Translation exposure to exchange rate risk

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Definitions:

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A type of scoliosis (spinal curvature) without a known cause, often diagnosed during adolescence.

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A rapid period of physical growth and development that typically occurs just before adolescence, marked by significant changes in height and body composition.

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A genetic disorder characterized by brittle bones that break easily, due to a defect in the production of a protein called collagen which is essential for bone strength.

Cure for the Disorder

The successful elimination or management of symptoms and causes of a specific disorder, restoring health.