A Major Disadvantage of Forward Currency Contracts Is

question 9

Multiple Choice

A major disadvantage of forward currency contracts is

• A)the margin that must be committed at the time one enters the contract
• B)standardized contract dollar amounts
• C)only three banks offer them in the U.S.
• D)none of the above

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Definitions:

Uniform Durable Power

A legal document that grants one person (the agent) the authority to act on behalf of another (the principal) in a wide range of matters and remains in effect even if the principal becomes incapacitated.

UCC

This code, called the Uniform Commercial Code, acts as an all-encompassing body of law for managing commercial operations in the United States.

Duty to Inform

The legal obligation of one party to provide relevant information to another party in certain circumstances, such as in contracts or advisory relationships.

Law of Agency

A legal doctrine concerning the relationship where one party, the agent, is authorized to act on behalf of another, the principal, in transactions with third parties.