An MNC Frequently Uses Either Forward or Futures Contracts to Hedge

question 11

True/False

An MNC frequently uses either forward or futures contracts to hedge its exposure to foreign payables. To do so, the MNC can either sell the foreign currency forward or sell futures.

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Definitions:

Total Liabilities

The sum of all financial obligations or debts that a company has incurred and is responsible for repaying.

Owner's Equity

The residual interest in the assets of a company after deducting liabilities, representing the ownership stake of the company's shareholders or owner.

Total Assets

The sum of all resources owned by a company, valued in monetary terms, and reported on the balance sheet.

Building Appraised

The process of determining the estimated market value of a building by a professional appraiser.