Multiple Choice
Assume U.S. interest rates are significantly higher than German rates. A U.S. firm with a German subsidiary could achieve a lower financing rate without exchange rate risk by denominating thebonds in
A) dollars.
B) euros and making payments from U.S. headquarters.
C) euros and making payments from its German subsidiary.
D) dollars and making payments from its German subsidiary.
Correct Answer:
Verified
Correct Answer:
Verified
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