Which of the Following Does Not Represent the Risk from Using

question 119

Multiple Choice

Which of the following does not represent the risk from using forward contracts?

• A) A forward contract is used to hedge receivables, and the spot exchange rate at the expiration of the contract exceeds the contract price.
• B) A forward contract is used to hedge receivables, and the spot exchange rate at the time of expiration of the contract is lower than the contract price.
• C) A forward contract is used to hedge payables, and the spot exchange rate at the time of expiration of the contract is lower than the contract price.
• D) A forward contract is used to hedge payables or receivables, and the amount to be received or paid is canceled.

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Definitions:

Psychoneuroimmunology

An interdisciplinary field studying the interaction between psychological processes, the nervous system, and immune function.

Behavioral Medicine

An interdisciplinary field that combines both medical and psychological approaches to address and treat physical health and illness.

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Refers to the changes in health resulting from specific measures or investments, encompassing a wide range of factors from physical health to psychological well-being.

Catharsis

The process of releasing, and thereby providing relief from, strong or repressed emotions through particular activities or actions.