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PTT has a number of subsidiary companies around the world, including FTT based in Europe...

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PTT has a number of subsidiary companies around the world, including FTT based in Europe and CTT based in Indonesia

CTT purchases all of us raw materials from FTT CTT processes these materials and the resulting products are exported to several different countries CTT pays FTT in the Indonesian currency.

Indonesia's inflation is higher than that of FTTs home country

Which of the following statements are correct?

Select ALL that apply

A.

FTT will be exposed to transaction risks as the Indonesian currency will appreciate over time because of the expected inflation rates

B.

FTT will be exposed to transaction risk The Indonesian currency that it receives Is likely to decline over time because of anticipated inflation

C.

FTT could ask for ail payments to K to be made in its home currency, which would reduce exposure to currency risk

D.

CTT will be exposed to translation risk because FTT will almost certainly have to reflect the changing prices in its selling price and it will be difficult for CTT to make a profit

E.

FTT could investigate whether it could import anything from Indonesia in order to create a natural hedge.

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