If an MNC Uses a Long-Term Forward Contract to Hedge

question 43

True/False

If an MNC uses a long-term forward contract to hedge the exchange rate risk associated with a bond denominated in euros, it would sell euros forward.

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Definitions:

Disjunctive

Relating to or involving a choice between mutually exclusive possibilities or a situation that requires a selection to be made from among such possibilities.

Injunctive

Pertaining to an order or directive issued by an authority, often legal in nature, requiring specific actions to be taken or avoided.

Adjunctive

Supplementary or additional to something rather than being an essential part; often used in the context of treatments or activities that support a primary objective.

Conjunctive

Serving to connect or combine items logically, typically used in reference to words or phrases.