International Businesses Use Foreign Exchange Markets for Many Reasons

question 41

Multiple Choice

International businesses use foreign exchange markets for many reasons. Which of the following is one of these reasons?

• A) to receive payments from domestic investors that are in local currencies
• B) to pay a foreign company for its products or services in its native country's currency
• C) to invest for short terms in money markets when they have spare cash
• D) to cover themselves from all risks involved in currency speculation

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Definitions:

Oxygen

A chemical element with symbol O, essential for cellular respiration in aerobic organisms and required for most combustion.

Respiration

The metabolic process by which an organism obtains energy by reacting oxygen with glucose to give water, carbon dioxide, and ATP (energy).

Electrons

Subatomic particles with a negative charge that orbit the nucleus of an atom, involved in chemical reactions and electricity.

Oxidation-Reduction Reaction

Reaction in which one molecule is oxidized and another is reduced.