Laketown Co

question 26

Multiple Choice

Laketown Co. has some expenses and revenue in euros. If its expenses are more sensitive to exchange rate movements than revenue, it could reduce economic exposure by ____. If its revenues are more sensitive than expenses, it could reduce economic exposure by ____.

• A) decreasing foreign revenues; decreasing foreign expenses
• B) decreasing foreign revenues; increasing foreign expenses
• C) increasing foreign revenues; decreasing foreign revenues
• D) decreasing foreign expenses; increasing foreign revenues

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Definitions:

Intentional

In law, actions performed with the conscious objective or purpose to accomplish a particular result.

Comparative Negligence

A legal doctrine that reduces the amount of damages a plaintiff can recover in a negligence-based claim, based upon the degree to which the plaintiff's own negligence contributed to cause the injury.

Implied Assumption

An unstated understanding or presumption that underlies an agreement or contract, accepted as a term by the parties involved.

Risk Doctrine

A principle in law that assigns liability based on the foreseeable risk created by actions or negligence, particularly in situations where harm could have been prevented.