Banner Electronics has subsidiaries in several international locations and is concerned about its exposure to foreign exchange risk. In countries where currency values are likely to fall, Banner should encourage all of the following EXCEPT
a. Granting trade credit wherever possible
b. Investing excess cash in inventory or other real assets.
c. Purchasing materials and supplies on a trade credit basis.
d. Borrowing local currency funds if an appropriate interest rate can be obtained.
Answer: a.