Standard Financial Theory Advocates That MNCs Separate Their Financing and Investing

question 27

Multiple Choice

Standard financial theory advocates that MNCs separate their financing and investing decisions:

• A)so MNCs generally do consider decisions on where and how to invest separately from their decisions on how to finance their investments.
• B)but MNCs,in particular,often reject this advice and take chances with currency exposure by combining investing and financing decisions.
• C)but currency risk can require that firms considering financing opportunities with consideration of investment opportunities.
• D)so MNCs often finance their capital needs in one currency and make their investments in another currency.

---

Definitions:

Bone

Bone is a durable connective tissue comprised of collagen, calcium, and other minerals, forming the skeletal structure that supports and protects the body's organs and allows movement.

Kidneys

Vital organs responsible for filtering waste products from the blood and excreting them in urine, regulating electrolyte levels, and managing blood pressure.

Muscle

A tissue composed of fibers capable of contracting to produce movement in parts of the body.

Thromboxane

A lipid molecule that plays a role in the clotting of blood and constriction of blood vessels, contributing to the regulation of blood flow.