Which of the Following Would Strongly Support a Business Strategy

question 31

Multiple Choice

Which of the following would strongly support a business strategy for managing risks uniquely associated with commitments made by employees to suppliers or customers?

• A) Identify a knowledgeable individual to be risk department manager.
• B) Retain legal counsel to act as in-house counsel to the business.
• C) Establish policies and financial limits for commitments to customers.
• D) Deal with each risk and assign responsibility for each action.

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Definitions:

Forward Contract

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

Swap Contract

An agreement by two parties to exchange, or swap, specified cash flows at specified intervals in the future.

Currencies

Forms of money that are issued by governments and used as a medium of exchange for goods and services in economic transactions.

Interest Rates

The percentage charged on the total amount borrowed or earned, reflecting the cost of borrowing or the yield on investments.