A Fixed Cost Remains Constant If Expressed on a Unit

question 60

True/False

A fixed cost remains constant if expressed on a unit basis.

Understand the concepts of cross hedging and surrogate hedging.

Explain the role and operation of foreign exchange futures and forwards markets.

Recognize the relationship between commodity spot prices, futures prices, and the cost of carry.

Understand the risk management techniques using futures contracts.

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Definitions:

Relationship

A connection, association, or interaction between two or more variables, where changes in one variable affect the other(s).

Independent Variables

Refers to the inputs or predictors in a statistical model that are manipulated or selected by the researcher to determine their effect on the dependent variable.

COV

A measure of relative variability computed as the standard deviation divided by the mean; also known as the coefficient of variation.

Independent Variables

Variables in a statistical model that are presumed to influence or predict the outcome of a dependent variable.