What Has Occurred When One Company Arranges to Buy a Foreign

question 24

Multiple Choice

What has occurred when one company arranges to buy a foreign currency sometime in the future, at an exchange rate quoted today?

• A) The company has purchased a foreign currency option.
• B) The company has entered a forward contract.
• C) The currency has been devalued.
• D) None of the above

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Definitions:

Semipermeable Membrane

A type of membrane that allows certain molecules or ions to pass through it by diffusion and occasionally specialized "facilitated diffusion," while blocking others.

Diffusion

The process by which molecules move from an area of higher concentration to an area of lower concentration, driven by thermal energy.

Polymyxin B

An antibiotic used to treat bacterial infections by disrupting the cell membrane, primarily active against Gram-negative bacteria.

Neurotoxin

A toxin that specifically targets neural tissues, potentially causing damage to the nervous system, which includes both central and peripheral components.