When an Individual or Firm in the United States Requests

question 76

Multiple Choice

When an individual or firm in the United States requests that a bank sell foreign exchange,the bank will probably

• A)call a foreign bank and arrange a purchase.
• B)call the central bank and arrange a purchase.
• C)call another bank customer with foreign exchange holdings.
• D)call a foreign exchange broker and arrange a purchase.

---

Definitions:

Residual Dividend Policy

A strategy where dividends are paid out of the remaining net income after meeting the company's investment needs.

Target Capital Structure

Target capital structure is the mix of debt, preferred stock, and common equity that a company aims to maintain to finance its operations and fund its growth.

Net Income

The final amount a company earns, post all deductions for expenses and taxes from its overall revenue.

Total Dividend Payment

The sum of all dividends a company pays out to its shareholders over a specific period.