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If You Fear the Dollar Will Rise Against the French

Question 11

Multiple Choice

If you fear the dollar will rise against the French franc, with a resulting adverse change in the dollar value of the equity of your French subsidiary, you can hedge by


A) selling francs forward in the amount of net assets
B) buying francs forward in the amount of net assets
C) reducing the liabilities of the subsidiary
D) selling francs forward in the amount of total assets

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