Exchange Rate Risk Can Be Eliminated with a Bank Contract

question 43

True/False

Exchange rate risk can be eliminated with a bank contract for delivery of the foreign currency when needed at a fixed exchange rate. The process is called pledging because the bank pledges to accept the exchange rate risk for a fee.

---

Definitions:

Breach of Contract

Occurs when one party fails to fulfill their obligations under a contract, leading to legal consequences.

Lottery Office

A place or establishment where lottery tickets are sold and winning tickets are redeemed.

Play Slip

A form or ticket used by players to select numbers for lottery games before purchase.

UCC

A collection of laws and regulations in the United States that govern commercial transactions and the sale of goods.