Which of the Following Statements Is TRUE

question 25

Multiple Choice

Which of the following statements is TRUE?

• A)The historical rate is the exchange rate at the date of the transaction and the closing rate is the exchange rate at the end of the reporting period.
• B)The historical rate is the exchange rate at the beginning of the reporting period and the closing rate is the exchange rate at the end of the reporting period.
• C)The historical rate is the exchange rate at the beginning of the reporting period and the forward rate is the exchange rate at the end of the reporting period.
• D)The spot rate is the exchange rate at the date of the transaction and the closing rate is the exchange rate at the conclusion of a hedge instrument.

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Definitions:

EZ Ice Cream Inc.

Presumably a fictional company; without more context, it would represent a hypothetical business entity.

Condition Precedent

A condition in a contract that must be met before a party’s promise becomes absolute.

Condition Subsequent

A condition in a contract that operates to terminate a party’s absolute promise to perform.

Express Condition

A clearly stated, specific requirement within a contract that must be met for the contract to be fulfilled or an obligation to become due.