The foreign subsidiary of a U.S. firm is profitable when profits are measured in the foreign currency but those profits become losses when measured in U.S. dollars. This is an example of which one of the following? A. Interest rate disparities B. Short-run exposure to exchange rate risk C. Long-run exposure to exchange rate risk D. Political risk associated with the foreign operations E. Translation exposure to exchange rate risk
The foreign subsidiary of a U.S. firm is profitable when profits are measured in the foreign currency but those profits become losses when measured in U.S. dollars. This is an example of which one of the following? A. Interest rate disparities B. Short-run exposure to exchange rate risk C. Long-run exposure to exchange rate risk D. Political risk associated with the foreign operations E. Translation exposure to exchange rate risk
Chapter17: Multinational Capital Structure And Cost Of Capital
Section: Chapter Questions
Problem 19QA
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The foreign subsidiary of a U.S. firm is profitable when profits are measured in the foreign currency but those
A. |
Interest rate disparities |
B. |
Short-run exposure to exchange rate risk |
C. |
Long-run exposure to exchange rate risk |
D. |
Political risk associated with the foreign operations |
E. |
Translation exposure to exchange rate risk |
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