A US Firm Has a Canadian Subsidiary That Remits a Large

A U.S. firm has a Canadian subsidiary that remits a large amount of its earnings to the parent on an annual basis. It also imports supplies from China, invoiced in Chinese yuan. The firm has no other foreign business, and needs a small loan. The firm could best reduce its exposure to exchange rate risk by borrowing:

A) U.S. dollars.
B) Canadian dollars.
C) Chinese yuan.
D) a combination of Canadian dollars and Chinese yuan.

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