In 1990,Goodyear Had Operations in Both Germany and the Netherlands

question 34

Multiple Choice

In 1990,Goodyear had operations in both Germany and the Netherlands.In the past the Dutch guilder and Deutsche mark were highly correlated in their movements against the U.S.dollar.If the Dutch unit has net inflows of guilders and the German unit has net inflows of DM,then Goodyear's combined transaction exposure

• A)approximately equals the sum of its guilder and DM exposures
• B)is less than the sum of its guilder and DM exposures because the currencies are highly correlated
• C)is less than the sum of its guilder and DM exposures because of diversification between the company's subsidiaries
• D)is not significant due to the highly correlated nature of the two currencies

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Definitions:

Desire to Harm

An intention or inclination to cause physical, emotional, or psychological injury to others.

Potency Bias

The tendency to perceive or attribute more strength, influence, or efficacy to a cause or actor than is warranted based on evidence.

Defense Mechanism

Psychological strategies employed by individuals to cope with reality and maintain self-image.

Promotion Determination

The process of deciding which employee is to be promoted, based on criteria such as performance, seniority, and suitability for the position ahead.