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Which of the Following Statements Are Correct

question 13

Multiple Choice

Which of the following statements are correct?
I.The usage of forward rates increases the short-run exposure to exchange rate risk.
II.Accounting translation gains and losses are recorded in the equity section of the balance sheet.
III.The long-run exchange rate risk faced by an international firm can be reduced if a firm borrows money in the foreign country where the firm has operations.
IV.Unexpected changes in economic conditions are classified as short-run exposure to exchange rate risk.

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Definitions:

Sole Task

A sole task is a single duty or responsibility assigned to a person or a system.

Continuous Budgeting

A financial planning approach that involves continuously updating a budget by adding a new period as the current period is completed.

Revising Budgets

The process of reviewing and adjusting planned budgets based on actual performance and changing circumstances.

Rolling Budget

A continuously updated budget that adds a new budget period (e.g., month, quarter) as the current period concludes, thereby extending the overall budget horizon.

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