Which of the Following Is the Best Definition of Exchange

question 54

Multiple Choice

Which of the following is the best definition of exchange rate risk.

• A) The market where one country's currency is traded for another's.
• B) International bonds issued in a single country, usually denominated in that country's currency.
• C) Federal Crown corporation that promotes Canadian exports by making loans to foreign purchasers.
• D) The idea that the exchange rate adjusts to keep purchasing power constant among currencies.
• E) The price of one country's currency expressed in another country's currency.

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Definitions:

Operating Income

Earnings before interest and taxes (EBIT), calculated by subtracting operating expenses from gross profit.

Operating Cycle

The average time period between purchasing goods for inventory and receiving cash from selling those goods.

Accounts Receivables

Sums due to a company from its customers for products or services rendered but not yet compensated for.

Investing Activity

Operations concerning the buying and selling of long-term assets and other financial investments that do not qualify as cash equivalents.