The Foreign Exchange Market Serves Two Main Functions

question 75

Multiple Choice

The foreign exchange market serves two main functions.These are

• A)collect duties on imported products and convert the currency of one country into the currency of another.
• B)insure companies against foreign exchange risk and set interest rates charged to foreign investors.
• C)collect duties on imported products and set interest rates charged to foreign investors.
• D)convert the currency of one country into the currency of another and provide some insurance against foreign exchange risk.
• E)reduce the trade imbalances between countries and convert the currency of one country into another.

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Definitions:

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the standard quantity expected to be used, multiplied by the standard cost per unit of material.

Labor Efficiency Variance

The difference between the actual hours worked and the standard hours expected, multiplied by the standard labor rate.

June

The sixth month of the year in the Gregorian calendar.

Variable Overhead Efficiency Variance

The difference between the actual variable overheads incurred and the standard variable overheads expected for the actual production, due to efficiency.