Which of the Following Is Not an Instrument Used by U.S.-Based

question 104

Multiple Choice

Which of the following is not an instrument used by U.S.-based MNCs to cover their foreign currency positions?

• A) forward contracts.
• B) futures contracts.
• C) non-deliverable forward contracts.
• D) options.
• E) all of the above are instruments used to cover foreign currency positions.

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Definitions:

Foreign Competitors

Companies based in another country that compete in the same market as domestic firms, often influencing pricing, innovation, and market share.

NAFTA

The North American Free Trade Agreement, a treaty entered into by the United States, Canada, and Mexico; it aimed at eliminating trade barriers between the three countries.

Multilateral Approach

A strategy involving multiple countries working together on a given issue or project, often used in international relations, trade agreements, and environmental policies.

Free Trade

A financial strategy that permits the trade of goods and services across borders without significant restrictions, tariffs, or bans.