In the Context of Managing Exchange Rate Risks, Which of the Following

question 24

Multiple Choice

In the context of managing exchange rate risks, which of the following best exemplifies a company that is engaged in forward exchange rate transactions?

• A) ABC Inc. purchases foreign currency at present-day rates in anticipation of future transactions.
• B) XYZ Corp. reaches an agreement with Iond bank to trade currency at a future date at the rate agreed to and specified at the time of the deal.
• C) RTN Inc. simultaneously purchases and sells the currency of Zanvia at two different rates.
• D) OPY Corp. diversifies its production of textiles to the global markets in which it operates.

Recognize the significance of liquidity ratios versus other types of financial ratios for short-term credit decisions.

Calculate and understand the significance of the accounts receivable turnover and its effect on company's liquidity.

Analyze the impact of specific financial activities on liquidity ratios.

Understand the relevance of financial ratios for stakeholders such as suppliers.

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Definitions:

Economize

The act of using resources efficiently, especially to reduce costs.

Payroll Tax

A tax imposed on employers or employees, and is usually calculated as a percentage of the salaries that employers pay their staff.

Medicare Beneficiaries

Individuals who are eligible to receive health care benefits under the Medicare program, typically those aged 65 and over or with certain disabilities.