Which of the Following Is Not a Method That a Firm

question 12

Multiple Choice

Which of the following is not a method that a firm can use to hedge its foreign currency risk?

• A)buying or selling currency forward contracts
• B)borrowing money in the currency of the country in which the project will be generating revenues
• C)investing in risk-free bonds denominated in the currency of the country in which the firm's manufacturing facilities are located
• D)moving production facilities to the country in which the final products will be sold

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Definitions:

Adjusted Trial Balance

An adjusted trial balance is a list of all the accounts of a company, including any adjustments, showing the final balances to be used for financial statements.

Financial Reports

Documents that provide an overview of a business's financial condition in both short and long term.

Asset

Any resource owned by a business or an individual that is expected to provide future benefits.

Liabilities

Financial obligations or debts that a company or individual owes to others, which must be satisfied in the future.