With Knowledge of Potential Risks, the Contractor Can Include Contingency

question 60

True/False

With knowledge of potential risks, the contractor can include contingency or management reserve amounts in the bid price.

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Definitions:

Transaction Exposure

The risk that the value of a company's foreign currency-denominated transactions will be adversely affected by exchange rate fluctuations.

Spot Rate

The existing market cost at which a specific asset is available for purchase or sale for instant delivery.

Forward Rate

The exchange rate specified in a forward exchange contract.

Premium

An amount paid for an insurance policy or an amount paid above the face value of a bond.