Consider a U

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: Ignoring transaction exposure in the yen, the translation exposure will indicate a possible need for a "balance sheet hedge" of

A) ¥200,000,000 more liabilities denominated in yen.
B) ¥200,000,000 less assets denominated in yen.
C) both a or b
D) none of the above