Which of the Following Statements Is False

question 7

Multiple Choice

Which of the following statements is false?

• A) Currency options allow firms to lock in a future exchange rate; currency forward contracts allow firms to insure themselves against the exchange rate moving beyond a certain level.
• B) Generally speaking, cash-and-carry strategies are used primarily by large banks, which can borrow easily and face low transaction costs.
• C) Currency options, like the stock options, give the holder the right-but not the obligation-to exchange currency at a given exchange rate.
• D) Many managers want the firm to benefit if the exchange rate moves in their favor, rather than being stuck paying an above-market rate.

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Definitions:

Exhalation

The process of breathing out or expelling air from the lungs, involved in the respiratory cycle.

Excretion

The process of eliminating waste products of metabolism and other non-useful materials from an organism's body.

Secretions

Substances produced and released by cells or glands in the body, which serve a variety of functions including lubrication, digestion, and defense.

Bleeding

The loss of blood from the circulatory system due to injury or illness.