Which of the Following Illustrates Non-Contractual Exchange-Rate Risk?
A)A Canadian $\le$

question 34

Multiple Choice

Which of the following illustrates non-contractual exchange-rate risk?

• A)A Canadian importer will owe \(\le\)50,000 and the pound is expected to appreciate
• B)A French airplane manufacturer has suppliers in Canada and the exchange rate has been unstable
• C)A Canadian distributor of Japanese electronic goods expects the Dollar to depreciate
• D)A Canadian subsidiary of a German manufacturer transfers DM100,000 to the parent annually

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Definitions:

Debt

An amount of money borrowed by one party from another, to be paid back with interest.

Shareholder Value

The worth delivered to shareholders due to management's ability to grow sales, earnings, and dividends over time.

Business Costs

All expenses incurred in the operation of a business, including manufacturing, marketing, and administrative expenses.

Fixed

A term describing costs or payments that do not change in amount over a certain period, regardless of production levels, business activity, or other factors.