Exchange-Rate Risk

question 35

Multiple Choice

Exchange-rate risk

• A) results from changes in the exchange rates between the currency of the investor and the country in which the investment is made.
• B) can be hedged by using a forward or futures contract in foreign exchange.
• C) cannot be eliminated.
• D) results from changes in the exchange rates between the currency of the investor and the country in which the investment is made and cannot be eliminated.
• E) results from changes in the exchange rates between the currency of the investor and the country in which the investment is made and can be hedged by using a forward or futures contract in foreign exchange.

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Definitions:

Hierarchy Of Needs

A theory in psychology proposed by Abraham Maslow, suggesting that people are motivated to fulfill basic needs before moving on to other, more advanced needs.

Unique

Being the only one of its kind; unlike anything else, often used to describe individuals, ideas, or items that stand out due to their distinctive qualities.

Adulthood Responsibilities

The duties and obligations that are typically expected of an individual upon reaching adulthood, including financial independence, employment, and possibly starting a family.

Stagnant

Showing no activity; dull and inactive, often used to describe water or air that lacks movement and growth.