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The Market for Long-Dated Forward Exchange Rate Contracts Is Thin

question 49

True/False

The market for long-dated forward exchange rate contracts is thin, which decreases the cost of eliminating foreign-exchange risk.

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Definitions:

Liability

The legal responsibility or obligation to compensate for harm caused, debts owed, or for fulfilling specific duties.

LLP

Limited Liability Partnership, a legal structure for a business where partners' liabilities are limited to their investment in the partnership.

Continuing Liability

An ongoing financial or legal responsibility that does not end upon the termination of a contract or agreement.

Nonwrongfully Dissociated

Pertains to a situation where a partner leaves a partnership in accordance with the terms of the partnership agreement or without causing harm to the partnership’s ability to continue.

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