When Referring to Foreign- Currency Transactions, Hedging Is a Process

question 47

Multiple Choice

When referring to foreign- currency transactions, hedging is a process in which:

• A)a company protects itself from losing money in one transaction by engaging in a counterbalancing transaction.
• B)companies sell the same product in various countries at similar prices to minimize the currency risks associated with any one particular country.
• C)companies wager that the currency of one country will rise relative to their own.
• D)a company wagers that the currency of one country will fall relative to its own.

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Definitions:

Stroma

The supportive tissue framework of an organ, or the dense fluid within chloroplasts where the Calvin cycle occurs in photosynthesis.

Chloroplast

An organelle found in plant and algal cells that conducts photosynthesis, converting light energy into chemical energy stored in glucose.

ATP Synthase Complex

An enzyme complex that synthesizes ATP, the cell's energy currency, using a proton gradient across the membrane.

Cellular Respiration

A metabolic process that converts glucose into ATP, releasing energy for cellular processes, occurring in the mitochondria of cells.