A Firm in the International Trade Phase of Globalization

question 60

Multiple Choice

A firm in the International Trade Phase of Globalization:

• A) makes all foreign payments in foreign currency units and all foreign receipts in domestic currency units.
• B) receives all foreign receipts in foreign currency units and makes all foreign payments in domestic currency units.
• C) bears direct foreign exchange risk.
• D) none of the above

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Definitions:

Actively Managed

In finance, refers to investment funds where the portfolio manager makes specific investments with the goal of outperforming an investment benchmark index.

Financial Intermediary

An institution that acts as a middleman between investors and borrowers, helping to channel funds from those with excess money to those in need of funds.

Resale Proceeds

The amount of money received from selling an asset that was previously purchased.

Price-Earnings Ratio

A valuation measure comparing the current share price of a company to its per-share earnings, used to evaluate if a stock is over or undervalued.