Which of the Following Statements Are Correct

question 13

Multiple Choice

Which of the following statements are correct?
I.The usage of forward rates increases the short-run exposure to exchange rate risk.
II.Accounting translation gains and losses are recorded in the equity section of the balance sheet.
III.The long-run exchange rate risk faced by an international firm can be reduced if a firm borrows money in the foreign country where the firm has operations.
IV.Unexpected changes in economic conditions are classified as short-run exposure to exchange rate risk.

• A)I and III only
• B)II and III only
• C)I, II, and III only
• D)II, III, and IV only
• E)I, III, and IV only

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Definitions:

Segregation Of Duties

A risk management and internal control principle that divides responsibilities among different people to reduce the risk of error or fraud.

Accounts Payable Clerk

A professional responsible for managing a company's outgoing bills and invoices, ensuring payments are made on time and records are kept.

Cheque Signing Authority

The power granted to an individual or individuals within an organization to sign checks on behalf of the company.

Internal Auditors

Professionals who conduct audits within an organization to review its operations, processes, and financial practices for efficiency, effectiveness, and compliance.