A US Firm Has Received a Large Amount of Cash Inflows

question 3

Multiple Choice

A U.S. firm has received a large amount of cash inflows periodically in Swiss francs as a result of exporting goods to Switzerland. It has no other business outside the U.S. It could best reduce its exposure to exchange rate risk by:

• A) issuing Swiss franc-denominated bonds.
• B) purchasing Swiss franc-denominated bonds.
• C) purchasing U.S. dollar-denominated bonds.
• D) issuing U.S. dollar-denominated bonds.

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