_____ a Parent Owns a Foreign Subsidiary That Has as Its

Multiple Choice

_____ A parent owns a foreign subsidiary that has as its functional currency the local currency. To avoid reporting a possible negative effect in the U.S. dollar financial statements from an adverse change in the exchange rate, the parent should hedge which of the following items?

A) The net investment (net asset) position.
B) The net monetary asset position.
C) The net monetary liability position.
D) The net monetary position whether it be positive or negative.