A US Firm Has Received a Large Amount of Cash Inflows

question 47

Multiple Choice

A U.S. firm has received a large amount of cash inflows periodically in Swiss francs as a result of exporting goods to Switzerland. It has no other business outside the U.S. It could best reduce its exposure to exchange rate risk by:

• A) issuing Swiss franc-denominated bonds.
• B) purchasing Swiss franc-denominated bonds.
• C) purchasing U.S. dollar-denominated bonds.
• D) issuing U.S. dollar-denominated bonds.

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Definitions:

Interaction

The process by which two or more entities or phenomena act upon and influence each other.

Natural Selection

The mechanism where organisms that are more suitably adapted to their surroundings are more likely to flourish and reproduce, serving as a crucial driver of evolutionary change.

Adaptive Flexibility

The ability to adjust one's thoughts and behaviors in response to changing circumstances and new information.

Organic Methyl Molecule

A molecule containing a methyl group (-CH3) that is part of an organic compound.