Consider a U Ignoring Transaction Exposure in the Yen,the Translation Exposure Will Indicate

Multiple Choice

Consider a U.S.-based MNC with manufacturing activities in Japan.The result of a change in the ¥-$ exchange rate on the assets and liabilities of the consolidated balance sheet is: $$\begin{array} { l l l } \text { Exposed assets } & \text { ¥ } & 700,000,000 \\\text { Exposed liabilities } & \text { ¥ } & 500,000,000\end{array}$$ Ignoring transaction exposure in the yen,the translation exposure will indicate a possible need for a "derivatives hedge" of

A) short position in ¥200,000,000 currency futures.
B) long position in ¥200,000,000 currency futures.
C) either short position in ¥200,000,000 currency futures or long position in ¥200,000,000 currency futures.
D) none of the options