An MNC Issuing Pound-Denominated Bonds May Be Completely Insulated from Exchange

question 19

True/False

An MNC issuing pound-denominated bonds may be completely insulated from exchange rate risk associated with the bond if its foreign subsidiary makes the coupon and principal payments of the bond with its pound receivables.

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Definitions:

Hepaticophyta

A division of non-vascular plants known as liverworts, which are small, herbaceous plants found worldwide, playing a key role in the ecology of moist habitats.

Anthocerophyta

A phylum of non-vascular plants known as hornworts, characterized by a sporophyte that resembles a horn.

Ferns

A group of non-flowering vascular plants that reproduce via spores and have neither seeds nor flowers.

Bryophyta

A division of non-vascular land plants that are known as mosses, characterized by life-cycles with a dominant gametophyte stage.