Which of the Following Is Most Likely to Be True

question 13

Multiple Choice

Which of the following is most likely to be true of a branch office in the United States?

• A) It is liable for the debts of the parent company.
• B) It is considered a separate legal entity of the parent company.
• C) It does not have to be registered with any state agency.
• D) It is not liable for its own debts.

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Definitions:

Fair Value Hedge

A hedge of the exposure to changes in fair value of a recognized asset or liability, or an unrecognized firm commitment, that is attributable to a particular risk.

Forward Contract

A financial contract obligating the buyer to purchase, and the seller to sell a specific asset at a predetermined future date and price.

Spot Rates

The current market price at which a particular security can be bought or sold for immediate delivery.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.