Using Currency Derivatives to Reduce Potential Transaction,translation,and Economic Risks of Currency

question 35

Multiple Choice

Using currency derivatives to reduce potential transaction,translation,and economic risks of currency movements that could lead to losses for a firm or investor is called_____.

• A) hedging
• B) speculating
• C) a short position
• D) an organized exchange position
• E) a marked-to-market position

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Definitions:

Utilities Expense

The cost incurred by businesses or households for the consumption of utilities like electricity, water, and gas.

Journal Entries

A record of financial transactions in accounting, documenting the debit and credit effects on specific accounts.

Adjusting Journal Entries

Journal entries made in an accounting period to allocate revenue and expenses to the period in which they actually occurred.

Closing Journal Entries

Entries made at the end of an accounting period to transfer temporary account balances to permanent accounts and prepare for the next period.