Albert,an Employee at Morgan Stanley,has Been Given the Task of Handling

question 78

Multiple Choice

Albert,an employee at Morgan Stanley,has been given the task of handling the foreign exchange for a customer who is moving from Brazil to Switzerland in one week.Which of the following should Albert most likely use when exchanging the client's Brazilian real for Swiss francs?

• A) spot rate
• B) cross rate
• C) currency option
• D) current U.S. rate

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Definitions:

Economic Profits

Profits calculated by subtracting total explicit and implicit costs from total revenues; measures the excess over both the opportunity cost of capital and the wages that business owners could have earned elsewhere.

Marginal Cost

The escalation in total expenses incurred from the production of an additional unit of a product or service.

Marginal Costs

The change in total cost that comes from making or producing one additional item.

MC Curve

A graph representing the marginal cost of producing each additional unit of output in a firm or economy.