In the Context of Managing Exchange Rate Risks, Which of the Following

question 44

Multiple Choice

In the context of managing exchange rate risks, which of the following statements is true of FX swaps?

• A) The simultaneous purchase and sale of a given amount of currency is prohibited.
• B) An option is provided to a buyer to purchase the right to buy a certain amount of currency at a given exchange rate.
• C) A spot transaction is coupled with a forward transaction where both are completed at the same time.
• D) The spot rate is a prediction of future forward rates so that a company can bypass uncertainty in the currency market.

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Definitions:

Internal Attribution

The inference that a person is behaving in a certain way because of something about the person, such as attitude, character, or personality.

Birth Cohorts

Groups of individuals born during the same period who experience similar historical and social conditions.

Internal Attribution

The process of ascribing the cause of a behavior to personal aspects such as personality, disposition, or attitude.

Self-Serving Bias

The tendency to take credit for success but deny responsibility for failure.