Consider the following

C. buying Hong Kong dollars from a bank (quoted at A$.55) that has quoted the South African rand/ Hong Kong dollar exchange rate at SAR3.00 when the spot rate for the rand is A$.20.

Calculation is given Below:-

we have 1 AUD

we bought HK$ from bank, Now we have = 1/.55 = 1.81 HK$

Now we convert that HK$ into SAR = 1.81*3 = 5.43 SAR

Now Convert that SAR into AU$ = 4.525*.2 = 1.086 AU$

so we had started with the 1 AU$ and Now we have 1.086 AU$ so we have Arbitarge Gain of = 0.086 AU$

MNCs typically prefer to hedge exchange rate risk because, Hedging against exchange rate changes can reduce the uncertainty of future cash flows that the company can expect to receive in the near future. Through hedging the company can stabilise it's earnings and other expenses to be incurred. Also the creditors of the company want them to maintain low exposure to exchange rate risk.

So, the correct answer is option (b) that Creditors prefer MNCs that maintain low exposure to exchange rate risk