A Firm Needs to Develop a Mechanism for Ensuring It

question 73

Multiple Choice

A firm needs to develop a mechanism for ensuring it maintains an appropriate mix of tactics and strategies for minimizing its foreign exchange exposure.Which of the following is true of the mechanism required?

• A)Firms should focus solely on managing transaction and translation exposures.
• B)Forecasting future exchange rate movements should be avoided as it is speculative.
• C)Firms need to develop strategies for dealing with economic exposure.
• D)Firms should avoid central control of exposure.

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Definitions:

Existential Instantiation

A logical process in formal argumentation where an existential quantifier (e.g., "there exists") leads to the establishment of an instance of its subject.

Universal Instantiation

A logical rule that allows for the conclusion that a general statement applies to a specific instance.

Existential Generalization

A logical operation that infers the existence of at least one member of a domain that satisfies a given property from a particular case or instance.

Quantifier Negation

A transformation in formal logic that involves altering the scope of negation in relation to quantifiers in a statement.