MULTIPLE CHOICE 1) Translation exposure measures A) an unexpected change in exchange rates impact on short run expected cash flows B) changes in the value of outstanding financial obligations incurred prior to a change in exchange rates. net income international operations. C) the potential for an increase or decrease in the parent company's net worth and reported caused by a change in exchange rates since the last consolidation of D) none of the above 2) Consider two different foreign subsidiaries of Georgia-Pacific Wood Products Inc. The first subsidiary mills trees in Canada and ships its entire product to the Georgia-Pacific U.S. The second subsidiary is also owned by the parent firm but is located in Japan and retails tropical hardwood furniture that it buys from many different sources. The first subsidiary is likely a/an foreign entity with most of its cash flows in US. dollars, and the second subsidiary is more of alan foreign entity. A) self-sustaining: integrated C) domestic; integrated B) integrated; self-sustaining D) self-sustaining: domestic 3) Under the U.S. method of translation procedures, if the financial statements of the foreign subsidiary of a U.S. company are maintained in U.S. dollars, A) translation is accomplished through the temporal method. B) translation is not required. C) translation is accomplished through the current rate method. D) the translation method to be used is not obvious. 4) If the European subsidiary of a U.S. firm has net exposed assets of 500,000, and the euro increases in value from $1.30/ to $1.35/ the U.S. firm has a translation A) loss of 525,000 C) gain of $25,000 B) gain of $525,000 D) loss of $25,000 5) A balance sheet hedge requires that the amount of exposed foreign currency assets and liabilities