An MNC Faced with the Need for a Certain Amount

question 15

Essay

An MNC faced with the need for a certain amount of foreign currency at a specific date in the future has two choices in guaranteeing the cost of acquiring that foreign currency: it can simply buy the needed currency now and hold that currency until it is needed at the future date,or it can buy a forward contract for the currency and guarantee the exchange rate that it will use to acquire the currency at the future date.What are the primary differences in these approaches:

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Definitions:

Economic Structures

The complex frameworks that define the economic organization, activities, and relationships within a society.

Kulturkampf

Literally "culture struggle," the conflict between the German imperial government and the Roman Catholic Church from about 1871 to 1887, over control of educational and ecclesiastical appointments.

Bismarck's Policy

The political strategies and foreign policies implemented by Otto von Bismarck, Chancellor of the German Empire, aimed at achieving German unification and maintaining European stability through diplomacy and the balance of power.

Catholicism

The branch of Christianity headed by the Pope, based in Rome, and characterized by its traditions, teachings, and practices.