Because the Relative Values of Currencies May Change, Firms Cannot

question 69

True/False

Because the relative values of currencies may change, firms cannot use the currency exchange markets to reduce the risk of holding too much of certain currencies.

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Definitions:

Direct Exporting

The sale of products directly to customers or retailers in another country, without the involvement of intermediaries.

Increased Profits

A rise in the amount of net earnings gained from business operations after all costs have been subtracted.

Indirect Exporting

A form of exporting where a company sells its products to a third party, such as an export intermediary, who then sells the products in foreign markets.

Intellectual Property

Legal rights that result from intellectual activity in the industrial, scientific, literary, or artistic fields.