A Short-Term Financial Decision Based on an MNC Management's Expectation

question 102

Multiple Choice

A short-term financial decision based on an MNC management's expectation that the local foreign currency will appreciate may be ________.

• A) increasing local customers' accounts receivable and increasing local notes payable
• B) decreasing local notes receivable and decreasing accruals
• C) increasing local inventories and increasing local notes payable
• D) increasing local accounts receivable and decreasing local accounts payable

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Definitions:

Modified Duration

A measure of the sensitivity of the price of a bond or a bond portfolio to a change in interest rates, adjusted for the possibility that the bond may be called before maturity.

Basis Point

A basis point is a unit of measure used in finance to describe the percentage change in the value or rate of a financial instrument, equivalent to 0.01%.

Interest Rates

The fee, shown as a percentage of the principal amount, that a lender imposes on a borrower for the use of assets.

T-bill Rate

The yield on U.S. Treasury bills, a benchmark for short-term interest rates in the United States.