MNC's often use derivatives to control:
A)currency exposure.
B)management compensation.
C)operating exposure.
D)hedging.

Question

Quizplus · Accepted Answer

Multinational corporations (MNCs) often use derivatives to manage their currency exposure, which refers to the risk of financial loss due to fluctuations in foreign currency exchange rates. By using derivatives such as forward contracts, options, and swaps, MNCs can hedge against currency risk and protect themselves from potential losses. Derivatives are less commonly used to control management compensation or operating exposure, and hedging is simply another term for managing currency exposure.

MNC's Often Use Derivatives to Control