Long-Term Forward Contracts Are a Possible Way to Hedge the Distant

question 52

True/False

Long-term forward contracts are a possible way to hedge the distant sale of fixed assets in foreign countries, but they may not be available for many emerging market currencies.

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Definitions:

Economic Theory

A collection of theories and frameworks that describe the workings of economies and the interactions between economic participants.

Communications

The act or process of exchanging information and ideas through various mediums and platforms.

Transaction Costs

Expenses incurred when buying or selling goods and services, encompassing fees, taxes, and other costs.

Middlemen

People who buy and sell goods or services or arrange trades. A middleman reduces transaction costs.