Question: Company C 3 is a U . S . multinational that has net cash inflows of Swiss francs and euros. Company D 4 is a

Company C

3

is a U

.

.

multinational that has net cash inflows of Swiss francs and euros. Company D

4

is a U

.

.

multinational that has net cash inflows of Swiss francs and net outflows of euros. Both companies are of similar size and operations. The Swiss franc and the euro are both highly positively correlated with each other when measuring their movements versus the USD. Which of these two firms has a greater FX risk exposure?

4

3

The two companies have similar levels of exposure

Neither company has any exposure to FX risk.

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