If a Firm Must Pay for Goods It Has Ordered

question 9

Multiple Choice

If a firm must pay for goods it has ordered with foreign currency, it can hedge its foreign exchange rate risk by ________.

• A) selling foreign exchange futures short
• B) buying foreign exchange futures long
• C) staying out of the exchange futures market
• D) selling foreign exchange forward contracts short

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Definitions:

Nonmyelinated Axons

Axons that lack a myelin sheath, causing them to conduct nerve impulses more slowly than myelinated axons.

Fast Nerve Fibers

Nerve cells that transmit signals rapidly, involved in the processing of information that requires quick responses, such as sharp, immediate pain or motor coordination.

Pain Sensations

The unpleasant sensory and emotional experience associated with actual or potential tissue damage or described in terms of such damage.

Distract

The act of diverting attention away from a primary focus or task, leading to a decrease in concentration or performance.