Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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1.) Assume your U.S. firm currently has a profit center in Malaysia, receiving a significant number of Malaysian Ringgit (MYR) every year. This is the only direct exchange rate exposure you currently have You want to borrow money to operations in Malaysia and would like to do it in a way that will help minimize your exchange rate risk (transaction risk). Which currency should you borrow: USD; MYR; JPY (Japanese Yen)? Explain how that helps minimize your transaction risk.
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