One Important Purpose of the Forward Markets for Foreign Exchange

question 22

Multiple Choice

One important purpose of the forward markets for foreign exchange allows global traders to protect themselves by ________.

• A) hedging
• B) arbitraging
• C) speculating
• D) preventing default

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Definitions:

Operating Leases

Leases where the lessor retains significant risks and rewards of ownership, typically for assets that are used for a short period of the asset's life.

Capital Leases

A lease classified as an asset on a company's balance sheet, indicating that the lessee has control over and assumes risk of ownership for the leased asset.

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health and operational efficiency.

Cash Flow Statement

An overview in financial form that captures the entirety of cash entering from operational undertakings and external funding, plus the cash exiting to cover business processes and investment actions within a set period.