A Major Risk with Pure Spot Transactions Is

question 39

Multiple Choice

A major risk with pure spot transactions is:

• A)It's difficult to predict what future costs will be
• B)If a market shortage arises, there is no obligation or loyalty to be called upon to secure supply
• C)There is less risk
• D)Both a and b above

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Definitions:

Money Demand

The desire or need to hold money as opposed to investing it, influenced by interest rates and economic activity.

Cyclical Unemployment

Unemployment that results from economic recessions and downturns, reflecting a lack of demand for goods and services.

Money Demand

The desire to hold cash or cash equivalents based on liquidity preference, influenced by interest rates, income levels, and transaction needs.

Interest Rate

The cost of borrowing money or the reward for saving, typically expressed as a percentage of the principal amount per annum.