Since Forward Contracts Are Easy to Use for Hedging, Any

question 70

True/False

Since forward contracts are easy to use for hedging, any exposure to exchange rate movements should be hedged.

---

Definitions:

Balance Sheet

A balance sheet is a financial statement that provides a snapshot of a company’s financial position, showing its assets, liabilities, and equity at a specific point in time.

Income Statement

A financial statement that shows a company's revenues and expenses over a particular period, resulting in a profit or loss.

Consignment Basis

A business arrangement where goods are left with a third party to sell, and the owner of the goods receives payment only when the items are sold.

Year-End Inventory

The total value of all unsold goods held by a company at the end of its fiscal year, used for financial and tax reporting purposes.