All of the following are management tools available for a U.S.company to hedge its net investment in a foreign affiliate except for:
A)Forward exchange contracts
B)Foreign currency commitments
C)Intercompany financing arrangements including intercompany transactions
D)None of the choices are correct.

Question

Quizplus · Accepted Answer

All the options listed (A, B, C) are indeed tools that a U.S. company can use to hedge its net investment in a foreign affiliate. Forward exchange contracts can be used to lock in exchange rates, foreign currency commitments can help manage exposure to currency fluctuations, and intercompany financing arrangements can adjust the currency and cash flow risks within the company's global operations.

All of the Following Are Management Tools Available for a U.S.company