A5. Answer the following multimple choice question No explanation is needed. Only choose the correct answer. 1 mark each. Total Mark 3

1. A US-based MNC has a contract to import suppliets in which it agreed to pay in Malaysian ringgit. The US-based MNCs dollar cash flows are adversely affected if the

1 point

(a) Ringgit appreciates

(b) Ringgit depreciates

(c) Dollar appreciates

(d) both b & c

2. Which of the following is true of options?

1 point

1. The buyer decides whether the option will be exercised.
2. The seller decides whether the option will be exercised.
3. The seller pays the buyer the option premium.

3. Economic exposure is any exposure of an MNCs cash flows (direct or indirect) to exchange rate movements.

1 point

1. true
2. false