Your Firm,which Operates in the United States,has a Contractual Payment

question 110

Multiple Choice

Your firm,which operates in the United States,has a contractual payment of £1 million due in 3 months.Which of the following methods would be considered speculative regarding your exchange rate risk?

• A) Buy 1 million pounds now at the current spot rate.
• B) Buy 1 million pounds in 3 months at the current spot rate.
• C) Contract forward to buy 1 million pounds in 3 months.
• D) Borrow dollars, convert to pounds at spot, and invest for 3 months.

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Definitions:

Fetal Exposure

The impact of environmental factors or substances on a fetus during pregnancy, which may affect development or cause birth defects.

Selection Factor

A selection factor refers to any characteristic or criterion used to differentiate or choose between options, individuals, or groups, often based on predefined standards.

Cocaine

A powerful stimulant drug that is illegal in most countries, derived from coca leaves, and is known for its short-term euphoric effects, including increased energy and alertness.

Methodological Problem

Challenges or complications in the process and design of research or experimental studies.