If a Firm Must Pay for Goods It Has Ordered

question 97

Multiple Choice

If a firm must pay for goods it has ordered with foreign currency,it can hedge its foreign exchange rate risk by

• A) selling foreign exchange futures short.
• B) buying foreign exchange futures long.
• C) staying out of the exchange futures market.
• D) doing none of the above.

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Definitions:

Guppies

Small freshwater fish species, often used in aquariums, known for their vibrant colors and prolific breeding.

Predation

The preying of one animal on others, a biological interaction where a predator feeds on its prey.

Cichlids

A diverse family of freshwater fish known for their complex behaviors and varied colors and shapes.

Killifish

Small, colorful freshwater fish belonging to the family Cyprinodontiformes, known for their diverse habitats and as model organisms in scientific research.