A US Firm Has a Canadian Subsidiary That Remits a Large

question 41

Multiple Choice

A U.S. firm has a Canadian subsidiary that remits a large amount of its earnings to the parent on an annual basis. It also imports supplies from China, invoiced in Chinese yuan. The firm has no other foreign business, and needs a small loan. The firm could best reduce its exposure to exchange rate risk by borrowing:

• A) U.S. dollars.
• B) Canadian dollars.
• C) Chinese yuan.
• D) a combination of Canadian dollars and Chinese yuan.

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Definitions:

Aggression

Behavior that is intended to harm another person and that the other wants to avoid.

Being Too Hot

Experiencing an uncomfortably high body temperature or environmental temperature.

Being Too Cold

Often refers to a demeanor or attitude perceived as distant, unemotional, or lacking in warmth and friendliness.

Southern States

Geographical regions located in the southern part of the United States, characterized by distinct cultural, historical, and social traits.