Firms Use Forward Foreign Exchange Contracts Rather Than a Cash-And-Carry

question 71

Multiple Choice

Firms use forward foreign exchange contracts rather than a cash-and-carry strategy because ________.

• A) of lower transaction costs
• B) of inability to borrow in different currencies
• C) of higher interest costs if credit quality is poor
• D) all of the above

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Definitions:

Scenario Forecast Method

A planning tool that analyzes possible future events by considering alternative plausible conditions or scenarios.

Projection Forecast Method

A technique used to predict future trends based on historical data and analysis.

Delphi Technique

A forecasting method involving a panel of experts who anonymously answer questionnaires in multiple rounds, with the responses used to refine the next round of questions.

HR Demand

The projected need for human resources in an organization, based on future business activities and strategies.