Question: Company G 2 is a U . S . multinational that has net cash outflows of Swiss francs and net inflows of euros. Company D

Company G

2

is a U

.

.

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

3

is a U

.

.

multinational that has net cash outflows of Swiss francs and 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 lower FX risk exposure?

The two companies have similar levels of exposure

Neither company has any exposure to FX risk.

2

3

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