____ Exposure Occurs When an MNC Translates Each Subsidiary's Financial

question 46

Multiple Choice

____ exposure occurs when an MNC translates each subsidiary's financial data to its home currency for consolidated financial statements.

• A) Translation
• B) Transaction
• C) Economic
• D) None of the above

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Definitions:

Floating-Rate Bonds

Bonds with interest rates that adjust periodically based on a reference interest rate or index, protecting investors from interest rate risk.

Market Price

The price at which a product or service is traded in the competitive marketplace.

Put Provision

A clause found in certain securities that allows the holder to force the issuer to repurchase the security at specified prices before maturity.

Fixed Rate Bond

A bond that pays a predetermined interest rate to investors for the entire term of the bond.