Tools That Multinationals Can Use to Help Them Reduce the Risks

question 125

Multiple Choice

Tools that multinationals can use to help them reduce the risks inherent in making investments in foreign countries include:

• A)options.
• B)hedges.
• C)swaps.
• D)All of these are tools that multinationals can use to help them reduce the risks inherent in making investments in foreign countries.

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Definitions:

U.S. Treasuries

Debt securities issued by the U.S. Department of Treasury used to finance government spending as an alternative to taxation.

Interest Rates

Interest rates are the cost of borrowing money or the return for saving and depositing money, typically expressed as a percentage.

Zero-Coupon Bonds

Bonds that do not pay periodic interest payments but are issued at a substantial discount to their face value, maturing at par.

Coupon Rate

The annual interest rate paid by a bond as a percentage of its face value, typically expressed in annual terms.