The Firm That Enters into a Futures Contract with Respect

question 74

Multiple Choice

The firm that enters into a futures contract with respect to foreign exchange does so:

• A)to offset possible loss in its collection process by a gain in the delivery process of the futures contract
• B)in anticipation of an increase in the value of the currency of the country for which the contract is established
• C)to decrease the cost of their sales transactions
• D)to eliminate a loss in the collection process of their accounts receivable in that country

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Definitions:

Null Hypothesis

A statement that there is no difference or effect, typically to be tested against an alternative hypothesis proposing a difference or effect.

Significance Level

The probability of rejecting the null hypothesis when it is actually true; a threshold chosen by the researcher to indicate the level of evidence needed to reject the null hypothesis.

Kruskal-Wallis Test

A nonparametric statistical test used to compare three or more independent samples to determine if they originate from the same distribution.

P-value

The probability of obtaining a test statistic at least as extreme as the one that was actually observed, assuming that the null hypothesis is true.