Question

SportLife Drinks, a multinational soft drink brand, has been facing huge economic losses due to unpredictable exchange rate movements. In order to gain considerable immunity against such currency fluctuations, SportLife Drinks should __________.a. Pursue strategies that increase its economic exposure.
b. Avoid using instruments like forward market and swaps.
c. Disperse production to different locations around the globe.
d. Avoid contracting out manufacturing.
e. Restrict its low-value-added manufacturing to one location.

Answer 1

Answer:

C. Disperse production to different locations around the globe.

Explanation:

By dispersing production to different countries, Sportlife drinks will accumulate its income in different currencies.

If a certain type of currency is incinerating in value,  other types of currencies tend to increase in value. So, having multiple currencies at your disposal will pretty much maintain the total amount of your overall asset.

This will protect sport life drinks from the damage that might caused by currency fluctuation.