Which of the Following Is Probably NOT an Advantage of Foreign

question 47

Multiple Choice

Which of the following is probably NOT an advantage of foreign exchange risk management?

• A)The reduction of the variability of cash flows due to domestic business cycles.
• B)Increased availability of capital.
• C)Reduced cost of capital.
• D)All of the above are potential advantages of foreign exchange risk management.

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Definitions:

Labor

The measure of the work done by human beings in the economy, often referred to in terms of hours worked or total workforce.

Capital

Refers to the financial assets or resources that businesses use to fund their operations and grow, including cash, equipment, and buildings.

Increasing Returns

A concept in economics where an increase in the scale of production leads to a greater than proportional increase in output.

Copper Mines

Sites or locations where copper ore is extracted from the earth for commercial value and industrial use.