A US-Based Company That Exports Goods and Has Accounts Receivable Denominated

question 86

Multiple Choice

A U.S.-based company that exports goods and has accounts receivable denominated in a foreign currency ________.

• A) faces no risk if the relations between the countries get rough
• B) faces the risk that the U.S. dollar will depreciate in value relative to the foreign currency
• C) faces the risk that the U.S. dollar will appreciate in value relative to the foreign currency
• D) faces the risk that the foreign currency would appreciate in value relative to the U.S dollar

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Definitions:

Losses

The negative financial result from business activities when costs exceed revenues.

Market Message

A communication or signal sent through the movement in prices, volumes, or other market indicators that reflects the collective actions and sentiments of market participants.

Entrepreneurial Process

A sequence of steps starting from ideation to the creation and management of a new business venture.

Competitive Market Economy

An economic system where a large number of buyers and sellers interact, resulting in the efficient allocation of resources through competitive pricing.