The Currency Risk of an Exporter Can Be Reduced By

question 38

Multiple Choice

The currency risk of an exporter can be reduced by:

• A) hedging, using the foreign exchange futures.
• B) transacting only in the currency of the exporter's own country.
• C) buying a forward contract for the exporter's currency.
• D) all of the given choices.

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Definitions:

Ammonification

The conversion of nitrogen-containing organic compounds to ammonia (NH3) by certain soil bacteria (ammonifying bacteria); part of the nitrogen cycle.

Nitrogen Fixation

The conversion of atmospheric nitrogen (N2) to ammonia (NH3) by certain bacteria; part of the nitrogen cycle.

Ecological Pyramids

Graphical representations showing the relative amounts of energy or matter contained within each trophic level in a given ecosystem.

Pyramid of Numbers

A graphical representation showing the number of organisms at different trophic levels in an ecosystem, typically decreasing from producers to top predators.