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Forecasting future exchange rates may be useful for hedging, investment, and financing decisions of an MNC....

Forecasting future exchange rates may be useful for hedging, investment, and financing decisions of an MNC. a. True b. False

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Answer #2

Answer - The Correct answer is A. True

Exchange rate forecasts are necessary to evaluate the foreign denominated cash flows involved in international transactions. Thus, exchange rate forecasting is very important to evaluate the benefits and risks attached to the international business environment. So Such Forecasting Helps in taking Various Financing and Hedging Decisions in International Environment.

Forecasting Future Exchange rates Helps in Assessment of Firm exposure to Exchange rates Risks.

MNCs also Forecast Exchange rates to Develop Best Case and Worst case scenarios which directly helps in making Investment Decisions.

answered by: anonymous
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