A Forward Contact to Buy US$40 000 for a Planned

question 16

Multiple Choice

A forward contact to buy US$40 000 for a planned purchase transaction of US$50 000 has a hedge ratio of:

• A) 40%.
• B) 125%.
• C) 80%.
• D) 20%.

---

Definitions:

Frontier Controls

This term may refer to advanced management techniques or technologies applied at the boundary of what is known or controlled, often in the context of improving efficiency or innovation, but it's not a standard widely-recognized term.

Financial Regulations

Rules and laws that govern financial institutions, markets, and transactions to maintain stability and protect consumers.

Asia-Pacific Economic Cooperation

A forum for 21 Pacific Rim countries to promote free trade and economic cooperation throughout the Asia-Pacific region.

Global Marketplace

An international system for buying and selling goods and services, where businesses compete on a worldwide scale.