If a US Firm Desires to Avoid the Risk from Exchange Rate

question 22

Multiple Choice

If a U.S. firm desires to avoid the risk from exchange rate fluctuations, and it is receiving 100,000 in 90 days, it could:

• A) obtain a 90-day forward purchase contract on euros.
• B) obtain a 90-day forward sale contract on euros.
• C) purchase euros 90 days from now at the spot rate.
• D) sell euros 90 days from now at the spot rate.

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Definitions:

Purchase Decision

The final decision made by consumers regarding what, when, and from whom to buy a product or service.

Data Transmission

The act of transferring data or information between devices or locations.

Creative Arts

Various forms of artistic expressions including painting, music, literature, and dance that stimulate creativity and imagination.

Potential Buyer

An individual or organization likely to purchase a product or service based on certain criteria or interests.