Long-Term Forward Contracts Are a Possible Way to Hedge the Distant

question 52

True/False

Long-term forward contracts are a possible way to hedge the distant sale of fixed assets in foreign countries, but they may not be available for many emerging market currencies.

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Definitions:

Dividend Yield

The financial ratio that shows how much a company pays out in dividends each year relative to its stock price.

Total Asset Turnover

A financial ratio that measures a company’s ability to generate sales from its assets by comparing net sales with average total assets.

Inventory Turnover

A ratio showing how many times a company has sold and replaced inventory over a certain period of time, indicating the efficiency of inventory management.

Debt Ratio

A financial ratio that measures the proportion of a company's total debt to its total assets, indicating the leverage and financial risk of the company.