When an MNC Finances with a Floating-Rate Loan in a Currency

question 15

Multiple Choice

When an MNC finances with a floating-rate loan in a currency that matches its long-term cash inflows, the MNC is exposed to ____ risk.

• A) short; interest rate
• B) long; interest rate
• C) short; exchange rate
• D) none of the above

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Definitions:

Contingent Reward

A leadership approach that uses the promise of reward to motivate followers to achieve agreed upon goals, making the reward conditional on performance.

Cognitive Shortcuts

Mental strategies that simplify decision-making by using approximate, quick solutions instead of detailed analysis.

Stereotypes

Oversimplified generalizations about groups of people that may or may not reflect reality.

Gender Stereotypes

Preconceived notions or beliefs about the characteristics, roles, and behaviors of men and women based on their gender.