When the dollar strengthens, the reported consolidated earnings of U.S.-based MNCs are ____ affected by...
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Accounting
When the dollar strengthens, the reported consolidated earnings of U.S.-based MNCs are ____ affected by translation exposure. When the dollar weakens, the reported consolidated earnings are ____ affected.
a.
favorably, favorably affected but by a smaller degree
b.
favorably, favorably affected by a higher degree
c.
unfavorably, favorably affected
d.
favorably, unfavorably affected
One argument for exchange rate irrelevance is that:
a.
MNCs can hedge exchange rate exposure much more effectively than individual investors.
b.
investors can invest in a diversified stock portfolio of MNCs that have different exposures to exchange rates.
c.
purchasing power parity does not hold very well.
d.
MNCs are typically not diversified across numerous countries.
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