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Financing That Reduces Exchange Rate

Financing That Reduces Exchange Rate 



1. Currency Diversification. Why would a U.S. firm consider issuing bonds denominated in
multiple currencies?
2. Financing That Reduces Exchange Rate Risk. Kerr, Inc., a major U.S. exporter of products to
Japan, denominates its exports in dollars and has no other international business. It can borrow
dollars at 9 percent to finance its operations or borrow yen at 3 percent. If it borrows yen, it will be
exposed to exchange rate risk. How can Kerr borrow yen and possibly reduce its economic
exposure to exchange rate risk?




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23 Apr 2016

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    Financing That Reduces Exchange Rate

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