Consider the Following Hypothetical Foreign Exchange Portfolio: What Are the Daily

question 48

Multiple Choice

Consider the following hypothetical foreign exchange portfolio: What are the daily earnings at risk for the portfolio?

• A) $200 / 0.45 = $444.44
• B) $200 \(\times\) 0.45 = $90.00
• C) ($200 / 0.45) / 100 = $4.44
• D) ($200 \(\times\) 0.45) / 100 = $0.90

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Definitions:

Accounts Receivable Turnover

A financial ratio that measures how efficiently a company collects revenue by comparing net credit sales to the average accounts receivable.

Days' Sales

A measure of how efficiently a company converts its inventory into sales, typically calculated as days' sales in inventory or days sales outstanding.

Credit Terms

Conditions under which credit is extended by a seller to a buyer, detailing the repayment period, discount for early payment, and penalty for late payment.

Comparative Balance Sheet

Financial statements that show the financial position of a business at different points in time, allowing for comparison.