Which of the Following Statements Concerning Currency Exchange Rates Is

question 172

Multiple Choice

Which of the following statements concerning currency exchange rates is most accurate?

• A) Short-term exchange rate fluctuations can have a significant effect on the profits of global companies.
• B) Fluctuations in exchange rates among the world's currencies occur, but multinational companies are insulated from the affects because of direct investment.
• C) Exchange rate fluctuations are relatively rare, and when they occur, their effects are minimal.
• D) Exchange rate fluctuations are now almost nonexistent due in great part to the stability of the euro.
• E) Exchange rate fluctuations may affect the financial sector but rarely reach the consumer.

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Definitions:

Funding Requirements

The total amount of capital needed to support a business's operations, projects, or to fulfill other financial commitments.

Actuarial Assumptions

The hypotheses about demographic, financial, and other variables that actuaries use to calculate the liabilities and expenses of insurance and pension plans.

GAAP Standards

Generally Accepted Accounting Principles; a set of rules and standards used for financial reporting and accounting in the United States.

Pension Asset

Refers to the resources set aside by a company in a pension fund to meet future pension liabilities to its employees.