IF MARKET ANALYSTS PREDICT THAT THE EXCHANGE RATE WILL BE 5 ISRAEL...

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23. If market analysts predict that the exchange rate will be 5 Israel shekels per dollar at the maturity of the loan, which alternative would rational decision-makers recommend? A. direct loan for sure * B. credit swap for sure C. cannot tell D. all of the above E. none of the above Solution: The credit swap is better because it is cheaper and has no exchange risk. Chapter 10 Translation Exposure Management