The Portion of a Government's Indebtedness Owed to Foreigners Is

question 17

Multiple Choice

The portion of a government's indebtedness owed to foreigners is

• A) external debt.
• B) internal debt.
• C) not recoverable.
• D) net debt.

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Definitions:

Financial Asset

A financial asset refers to any asset that is cash, an equity instrument of another entity, or a contractual right to receive cash or another financial asset from another entity.

Transactions Exposure

The potential for a company's cash flows to be affected by changes in exchange rates due to transactions in foreign currencies.

Financial Risk

Financial risk involves the possibility that a company's cash flow will not be sufficient to meet its obligations, which can result from volatility in the markets, business operations, or creditworthiness.

Commodity Swap

A financial agreement where two parties exchange cash flows related to a specific commodity's price.