Question: Some U.S.-based MNCs have business in developing countries in which it is difficult to hedge their exposure to exchange rate risk. Their forecasts of the

Some U.S.-based MNCs have business in developing countries in which it is difficult to hedge their exposure to risk. Their forecasts of the currency's future is subject to much error because the currencies in these countries tend to be very volatile, and could possibly depreciate by 20% or more in a given year.. Write a short essay on how MNCs that have receivables in these currencies might be able to use forecasts to prepare for possible weak currency scenarios, so that they can assess whether they will have sufficient dollar cash inflows to cover their debt payments.

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