Your US Firm Has an Accounts Payable Denominated in UK Pounds

question 2

Multiple Choice

Your U.S firm has an accounts payable denominated in UK pounds due in 6 months. To protect yourself against unexpected changes in the dollar/pound exchange rate you should:

• A) buy a pound put option.
• B) sell a pound put option.
• C) buy a pound call option.
• D) sell a pound call option.

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Definitions:

Scatter Diagram

A graphical method used to display the relationship between two variables, typically to identify any correlation between them.

Work Shift

Scheduled periods of work for employees, often rotating among mornings, afternoons, and nights, to ensure continuous operation in industries such as healthcare, manufacturing, and service.

Service Quality

Refers to the evaluation of how well a delivered service matches the expectations of the customer.

Determinants

Factors or variables that decisively affect the nature or outcome of something.