Which of the Following Statements Is Least Correct Regarding Corporations

question 10

Multiple Choice

Which of the following statements is least correct regarding corporations involved in international business transactions?

• A) They may purchase currency put options to hedge future receivables denominated in a foreign currency.
• B) They may purchase currency call options to hedge future payables denominated in a foreign currency.
• C) They may purchase currency call options to hedge future receivables denominated in a foreign currency.
• D) They benefit from currency put options if the currency's value declines before the expiration date of the option.

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Definitions:

Component Percentages

Express each item on a particular financial statement as a percentage of a single base amount.

Income Statement

A financial statement that shows a company's financial performance, including revenues, expenses, and profits over a specified period.

Comparable Companies

A valuation method that involves comparing a company's financial metrics to those of similar companies in the same industry.

Operating Strategies

Plans and actions implemented by a business to support its operational objectives and to enhance competitive advantage.