Which of the Point(s)below Is (Are)true of Money

question 20

Multiple Choice

Which of the point(s) below is (are) true of money?
1) Money eliminated the need for barter.
2) Money allowed for specialization of labour and expansion of trade.
3) Money facilitated the development of a market economy.
4) Trade did not take place before the introduction of money.

• A)only 1.
• B)only 1 and 2
• C)Only 1 and 4
• D)Only 1,2,and 3.
• E)All of the points are true.

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Definitions:

Foreign Exchange Risk

The potential change in earnings or financial position from fluctuating exchange rates affecting international financial transactions.

Forward Contract

An agreement to buy or sell an asset at a future date for a price agreed upon today.

Spot Rate

Refers to the immediate exchange rate at which one currency can be exchanged for another without any delay.

Fair Value Hedge

A type of hedge that is used to mitigate the risk of changes in the fair value of an asset or liability or an identified portion of such an asset or liability.