One Argument That Favors Centralization of Foreign Risk Management Is

question 45

Multiple Choice

One argument that favors centralization of foreign risk management is the ability to take advantage of the portfolio effect through ________.

• A)risk shifting
• B)risk sharing
• C)offshore banking
• D)exposure netting

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Definitions:

Flexible Budget

A budget that modifies in response to fluctuations in activity levels or volume within an enterprise.

Manufacturing Costs

The total costs involved in making products which can include direct materials, direct labor, and manufacturing overhead.

Direct Material

These are the raw materials and components that are consumed directly in the manufacture of a product.

Variable Overhead

Costs that vary in total in direct proportion to changes in activity level or volume, such as utility costs or raw materials that fluctuate with production levels.