Which of the Following Statements Is Incorrect

question 24

Multiple Choice

Which of the following statements is incorrect?

• A) Forward contracts are contracts typically negotiated with a commercial bank that allow the purchase or sale of a specified amount of a particular foreign currency at a specified exchange rate on a specified future date.
• B) The forward market is located in New York City.
• C) Many of the commercial banks that offer foreign exchange on a spot basis also offer forward transactions for the widely traded currencies.
• D) Forward contracts can hedge a corporation's risk that a currency's value may appreciate over time.

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Definitions:

Joint Ventures

A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task, often with both sharing in the profits and risks.

Unfair Regulation

Imposed rules or laws considered unjust and detrimental to specific groups or entities.

Intellectual Property

Legal rights protecting creations of the mind, such as inventions, literary and artistic works, designs, and symbols.

Political Risks

Political risks are the probability of losses to a business, investment, or operation due to political instability, changes in government policy, or hostile actions by the government.