A US Company Has Subsidiaries Whose Functional Currency Is the U

Multiple Choice

A U.S. company has subsidiaries whose functional currency is the U.S. dollar. Assume the subsidiaries' liabilities remeasured at the current rate exceed their assets remeasured at the current rate. Which investment hedges the U.S. company's currency risk from these subsidiaries?

A) Investments in equity securities in the subsidiaries' currency
B) Investments in debt securities in the subsidiaries' currency
C) Debt denominated in the subsidiaries' currency
D) Forward sale in the subsidiaries' currency