An advantage of netting of multinational corporation

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Reference no: EM131562477

1. A put option on Japanese yen is written with a strike price of ¥95.00/$. Which spot exchange rate will maximize your profit if you choose to exercise the option?

a. ¥85.00/$

b. ¥90.00/$

c. ¥100.00/$

d. ¥115.00/$

And why?

2. An advantage of netting of a multinational corporation and its subsidiaries is that it:

a. increases foreign exchange risk.

b. decreases the total volume of inter-subsidiary fund flows.

c. increases the total amount of currency conversion.

d. decreases the number of employees.

And why?

Reference no: EM131562477

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