Which One of the Following Ways to Actively Manage Currency

question 22

Multiple Choice

Which one of the following ways to actively manage currency exposure usually results in little reduction in currency risk to a portfolio? Use of a(n)

• A) currency overlay manager who considers currency exposures alone
• B) jointly decided currency exposure and securities selection
• C) cash manager provided by the investors bank
• D) securities analyst who conducts research on economic fundamentals surrounding exchange rate changes

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Definitions:

Discount on Bonds Payable

The discrepancy between a bond's nominal value and its market price when the bond is sold below its nominal value.

Journal Entry

A record of a financial transaction in an accounting system, consisting of debits and credits to maintain the double-entry accounting.

Discount on Bonds Payable

The gap between the nominal value of a bond and the price it is sold at when this price is lower than the bond's nominal value.

Redeems

The act of repaying or buying back something, such as a company repurchasing its own shares or a bond issuer paying back the principal at maturity.