Advantages of a Fixed Exchange Rate Include

question 21

Multiple Choice

Advantages of a fixed exchange rate include

• A)reduction in exchange rate risk for businesses.
• B)reduction in transactions costs.
• C)reduction in trading frictions.
• D)all of the options

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Definitions:

Allowance for Doubtful Accounts

A contra-asset account that represents the estimated portion of accounts receivable that may not be collectible.

Bad Debts Expense

The amount of receivables that a company does not expect to collect and thus writes off as a loss in its accounting records.

Accounts Receivable Turnover

A financial ratio indicating how many times a company's accounts receivable are collected during a specific period.

Comparative Balance Sheets

Financial statements that present the financial position of a company at different points in time, side by side, to facilitate comparison.