What Has Occurred When One Company Arranges to Buy a Foreign

question 24

Multiple Choice

What has occurred when one company arranges to buy a foreign currency sometime in the future, at an exchange rate quoted today?

• A) The company has purchased a foreign currency option.
• B) The company has entered a forward contract.
• C) The currency has been devalued.
• D) None of the above

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Definitions:

Association

A connection or relationship between two or more variables, where changes in one variable correspond to changes in another.

Mean

In statistics, it is the arithmetic average of a set of numbers, calculated by adding them all up and dividing by the number of numbers.

Exceptionally High

Significantly surpassing the usual or average level, often in a way that is rare or unparalleled.

Participant Observation

A method used in social science research involving the immersion of the researcher in the environment of their subjects to observe and engage in their activities to gain a deeper understanding of their culture or behavior.