MNCs Can Use Short-Term Foreign Financing to Reduce Their Exposure

question 45

Multiple Choice

MNCs can use short-term foreign financing to reduce their exposure to exchange rate fluctuations. For example, if an American-based MNC has ____ in euros, it could borrow ____, resulting in an offsetting effect.

• A) payables; euros
• B) receivables; euros
• C) payables; dollars
• D) receivables; dollars

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Definitions:

Zygote

The initial cell formed when a sperm cell fertilizes an egg cell, marking the beginning of a human's genetic development.

Embryo

An early stage of development in multicellular organisms, in humans, it refers to the first eight weeks of development post-conception.

Placenta

A temporary organ that develops in female mammals during pregnancy, connecting the fetus to the uterine wall for nutrient uptake, waste elimination, and gas exchange via the mother's blood supply.

Fetus

A developing mammal or human from the end of the embryonic period (usually two months after conception) until birth.