In a Sales Contract Between Two Companies,one in Florida and One

question 23

Multiple Choice

In a sales contract between two companies,one in Florida and one in Kentucky,which of the following is true about which set of laws would apply:

• A)The CISG,because both parties to the sales transaction are residents of the United States.
• B)The UCC,because both parties to the sales transaction are residents of the United States.
• C)The UCC,but only if the parties opted out of the CISG.
• D)Both the CISG or the UCC would apply
• E)Neither the CISG nor the UCC would apply.

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Definitions:

Exchange Gain

A profit resulting from holding or transacting in foreign currencies as exchange rates vary.

Spot Rate

The existing selling or buying price of a certain currency for transactions that are completed right away.

Fair-Value Hedge

A hedge that is used to mitigate the risk of changes in the fair value of an asset, liability, or an unrecognized firm commitment.

Cost of the Hedge

The expenditure associated with implementing and maintaining a hedge against financial risk.