Adverse effects of exchange rates

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If stakeholders (such as stockholders or creditors) have stakes in a well-diversified portfolio of MNCs, then their portfolio's value might be insulated if the adverse effects of exchange rates on some MNCs are offset by favorable effects of exchange rates on other MNCs. Thus, the MNCs may not need to worry about exchange rate risk. Present a compelling rebuttal of the above argument.

Reference no: EM133068655

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