Which of the Following Does Not Represent the Risk from Using

question 68

Multiple Choice

Which of the following does not represent the risk from using forward contracts?

• A) if a forward contract is used to hedge receivables, and the spot exchange rate at the expiration of contract exceeds the contract price.
• B) if a forward contract is used to hedge receivables, and the spot exchange rate at the time of expiration of contract is lower than the contract price.
• C) if a forward contract is used to hedge payables, and the spot exchange rate at the time of expiration of contract is lower than the contract price.
• D) if a forward contract is used to hedge payables or receivables and the amount to be received or paid is cancelled.

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Definitions:

MMPI

The Minnesota Multiphasic Personality Inventory, a comprehensive psychological test used to assess personality traits and psychopathology.

Personality Tendencies

Refers to consistent patterns of thoughts, feelings, and behaviors that characterize an individual across different situations.

MMPI

The Minnesota Multiphasic Personality Inventory, a comprehensive psychological test designed to assess a variety of personality traits and psychopathologies.

Personality Disorders

A group of mental disorders characterized by enduring maladaptive patterns of behavior, cognition, and inner experience.