Which of the Following Statements Is FALSE

question 53

Multiple Choice

Which of the following statements is FALSE?

• A)Currency options allow firms to lock in a future exchange rate;currency forward contracts allow firms to insure themselves against the exchange rate moving beyond a certain level.
• B)Generally speaking,cash-and-carry strategies are used primarily by large banks,which can borrow easily and face low transaction costs.
• C)Currency options,like stock options,give the holder the right-but not the obligation-to exchange currency at a given exchange rate.
• D)Many managers want the firm to benefit if the exchange rate moves in their favor,rather than being stuck paying an above-market rate.

---

Definitions:

Office Building

A structure designed for administrative or professional activities, often housing offices for various businesses or services.

Accrual-Basis Accounting

An accounting method where income and expenses are recorded when they are earned or incurred, regardless of when the cash is actually received or paid.

Financial Statements

Reports that summarize the financial activities of a business, including the balance sheet, income statement, and cash flow statement.

Recognized

In accounting, recognized refers to the formal acknowledgment of a financial transaction or event in the financial statements of a business.