Which of the Following Illustrates Non-Contractual Exchange-Rate Risk

question 8

Multiple Choice

Which of the following illustrates non-contractual exchange-rate risk?

• A)A Canadian importer will owe £50,000 and the pound is expected to appreciate.
• B)A French airplane manufacturer has suppliers in Canada and the exchange rate has been unstable.
• C)A Canadian distributor of Japanese electronic goods expects the Dollar to depreciate.
• D)A Canadian subsidiary of a German manufacturer transfers DM100,000 to the parent annually.

---

Definitions:

Dividend Policy

A company's approach to distributing profits to its shareholders, determining the size and frequency of dividend payments.

Market Status

The current condition or position of a product, service, or company in the competitive marketplace.

Shareholders

Individuals or entities that own shares in a corporation, thus having a partial ownership interest in the company.

Investments

Assets or items acquired with the goal of generating income or appreciation in value over time.