Which of the Statements Below Is FALSE

question 6

Multiple Choice

Which of the statements below is FALSE?

• A)Forward rates play an important part in currency exchange because you can lock in future currency exchanges with these forward rates.
• B)From a business perspective,forward contracts are hedging tools for companies.By locking in a future exchange rate,companies can avoid unfavorable movements in exchange rates.
• C)When you convert your currency today,you are exchanging currency in the spot market.
• D)The International Fisher effect tells us that inflation rates are the same the world over.

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Definitions:

Corporate Governance

The framework of rules, practices, and processes by which a company is directed and controlled, often focusing on the interests of shareholders, management, customers, suppliers, financiers, government, and the community.

Financialization

A trend in which financial services, such as investment, become a more dominant sector in the national economy, influencing societal and economic structure.

Value Maximization

Refers to strategies aimed at increasing the overall value and performance of a company, maximizing shareholder wealth.

Capital Investment

Funds spent by a business to acquire or upgrade physical assets such as property, industrial buildings or equipment.