In Terms of Foreign Exchange,which of the Following Is True

question 9

Multiple Choice

In terms of foreign exchange,which of the following is true of leading and lagging strategies?

• A)They primarily protect long-term cash flows from adverse changes in exchange rates.
• B)They are used to minimize economic exposure of companies.
• C)They can help firms minimize their transaction and translation exposure.
• D)They involve accelerating payments from strong-currency to weak-currency countries.
• E)They are limited by governments because they create pressure on strong currencies.

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Definitions:

Significance Level

A threshold in hypothesis testing that determines the probability of rejecting a true null hypothesis, usually denoted as alpha (α).

Chi-squared Test

An analytical tool designed to assess if the observed frequencies differ significantly from those that were expected in one or more categories.

Normal Distribution

The distribution exhibits a symmetrical pattern centered on the mean, demonstrating the more common appearance of close-to-mean data than those at a distance.

Degrees Of Freedom

The number of values in a study that are free to vary when statistics, like variance, are being calculated, influencing the shape of various distributions.