1. (TRUE or FALSE) Firms cannot manage risk through hedging: entering into a financial agreement that does not offset or guard against risk.
2. (TRUE or FALSE) An exchange rate of two currencies found by using a common third currency is known as a currency cross rate.
3. (TRUE or FALSE) If the U.S. dollar strengthens relative to the euro during the year, McDonald’s U.S. dollar profits will be higher after converting the euros to dollars and repatriating the profits back to the United States.