Which of the Following Activities Would Reduce a Company's Exposure

question 8

Multiple Choice

Which of the following activities would reduce a company's exposure to exchange rate risk?

• A)Buying supplies in the country to which it exports
• B)Invoicing for services in one's own currency
• C)Exporting to a wide range of different currency areas
• D)All of the above measures reduce exchange rate risk

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Definitions:

Contingent Performance Obligation

An obligation in a contract that becomes enforceable only under certain conditions or upon the occurrence of specific events.

Additional Paid-In Capital

The amount of capital paid by investors for shares that exceeds the par value of the shares; also referred to as share premium.

Fair Value

An estimate of the market value of an asset or liability, reflecting current conditions and market perceptions.

Voting Stock

Shares in a company that grant the holder the right to vote on corporate matters, typically related to the election of the board of directors.