A Company Can Protect Against Exchange Rate Risk

question 36

Multiple Choice

A company can protect against exchange rate risk

• A)with a forward contract.
• B)by not having foreign operations.
• C)by hedging the price of its products.
• D)All of these choices is true.

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Definitions:

Beach

A natural landform alongside a body of water, typically consisting of sand, pebbles, or rocks, where people often go for recreation.

Residents

Individuals who inhabit a particular place or area, living in a specific locale either temporarily or permanently.

Utility Function

Represents how different combinations of goods or services can provide varying levels of satisfaction or utility to an individual, emphasizing the subjective valuation of consumption.

Gasoline

An explosive, quick-to-evaporate substance made from petroleum, mainly serving as a fuel source in internal combustion engines.