The Ability to Take Advantage of the Portfolio Effect Through

question 1

Multiple Choice

The ability to take advantage of the portfolio effect through exposure netting to manage foreign risk assumes the firm will use

• A)centralization of its hedging activities
• B)segmentation of its hedging activities to the firm's foreign subsidiaries
• C)decentralization of its hedging activities
• D)foreign banks and the purchase of forward contracts.

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Definitions:

Legal Title

A formal recognition of ownership of property or assets which includes the rights to use, sell, or control the said property or assets.

Containers On Flatcars (COFC)

A type of intermodal freight transport where shipping containers are carried on railroad flatcars for part of their journey.

Trailers On Flatcars (TOFC)

A freight system where trailers are transported on railway flatcars, combining road and rail transportation.

Containers On Marine Vessel (COMV)

Refers to the standard large containers used for shipping goods internationally by sea, placed and transported on a marine vessel.