Which of the Following Is Not True with Respect to Spot

question 45

Multiple Choice

Which of the following is not true with respect to spot market liquidity?

• A) The more willing buyers and sellers there are, the more liquid a market is.
• B) The spot markets for heavily traded currencies such as the Japanese yen are very liquid.
• C) A currency's liquidity affects the ease with which an MNC can obtain or sell that currency.
• D) If a currency is illiquid, an MNC is typically able to quickly purchase that currency at a reasonable exchange rate.

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Definitions:

Direct Manufacturing Cost

Costs that are directly attributable to the production of a specific product, including direct materials and direct labor.

Indirect Manufacturing Cost

Costs related to production that are not directly associated with the product, such as maintenance, supervision, and utilities.

Incremental Manufacturing Cost

The additional cost incurred to produce one more unit of a product, often considered for decision-making in production processes.

Product Costs

Costs that are directly associated with the creation of a product, including direct materials, direct labor, and manufacturing overhead.