Managers of MNCs are typically expected to use currency derivatives for speculation in order to improve profits.

Question

Quizplus · Accepted Answer

Managers of MNCs are expected to use currency derivatives for hedging, not speculation. Hedging involves protecting against potential currency fluctuations, while speculation is taking positions in the hopes of making a profit. MNCs may also use currency derivatives for other purposes such as managing cash flows and reducing risks associated with foreign investments.

Managers of MNCs Are Typically Expected to Use Currency Derivatives