Which of the Following Should an International Manager Keep in Mind

question 6

Multiple Choice

Which of the following should an international manager keep in mind about the constantly fluctuating exchange rates?

• A) The prices the firm charges should be quoted in the firm's currency exclusively.
• B) The firm and its customers should use the exchange rate as it stands on the date of each transaction, there is no scope for an agreement between them to use any other specific exchange rate.
• C) If goods are bought from a supplier whose currency is appreciating against the buyer's currency, the buyer will have to pay a lesser amount of their currency to complete the purchase.
• D) The time taken between placement and delivery of an order can at times go up to a few months; fluctuations in the exchange rate during that time can cost or earn the firm money.

---

Definitions:

Debt-to-Equity Ratio

A measure of a company's financial leverage, calculated by dividing its total liabilities by stockholders' equity.

Year 2

Typically refers to the second year in a designated time frame, often used in financial and performance analysis.

Times Interest Earned Ratio

A financial metric that measures a company’s ability to meet its interest obligations based on its current earnings before interest and taxes.

Equity Multiplier

A financial leverage ratio that measures the portion of a company’s assets that are financed by its shareholders' equity.