the following is an example of managing economic exposure by flexible sourcing policy?  An American company sells its products in Brazil and Portugal. Reduced sales in Brazil due to the dollar appreciation against the “real” can be compensated by increased sales in Portugal due to the dollar depreciation against the euro. If yen is strong, it is preferable for a Japanese company to open a manufacturing subsidiary in the U.S. to produce and sell its products there. An American IT company hires software developers in Ukraine because of the weak position of grivna against dollar. A Canadian company spends a lot of m

International Financial Management
14th Edition
ISBN:9780357130698
Author:Madura
Publisher:Madura
Chapter12: Managing Economic Exposure And Translation Exposure
Section: Chapter Questions
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Which of the following is an example of managing economic exposure by flexible sourcing policy? 

An American company sells its products in Brazil and Portugal. Reduced sales in Brazil due to the dollar appreciation against the “real” can be compensated by increased sales in Portugal due to the dollar depreciation against the euro.

If yen is strong, it is preferable for a Japanese company to open a manufacturing subsidiary in the U.S. to produce and sell its products there.

An American IT company hires software developers in Ukraine because of the weak position of grivna against dollar.

A Canadian company spends a lot of money for research & development activities to improve its reputation and gain more customers.

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