One Advantage of the Forward Exchange Market Is

question 44

Multiple Choice

One advantage of the forward exchange market is:

• A) That no buying/selling of the currency is needed until a specified date in the future.
• B) The use of fixed contracts.
• C) The initial deposit allows for further leveraging.
• D) That contracts deal only in small amounts.

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Definitions:

Insurance Cheque

A payment issued by an insurance company to cover losses or claims.

Carrying Amount

Carrying amount, also known as book value, is the value recorded on the balance sheet for a particular asset, reflecting its original cost minus any depreciation, amortization, or impairment costs.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against an asset over its useful life.

Impairment Loss

An impairment loss occurs when the carrying amount of an asset exceeds its recoverable amount, indicating the asset is not expected to generate future benefits worth its recorded value.