A company due to pay a certain amount of a foreign currency in the future decides to hedge with futures contracts. Which of the following best describes the advantage of hedging?
A. It leads to a better exchange rate being paid
B. It leads to a more predictable exchange rate being paid
C. It caps the exchange rate that will be paid
D. It provides a floor for the exchange rate that will be paid
B
Hedging is designed to reduce risk not increase expected profit. Options can be used to create a cap or floor on the price. Futures attempt to lock in the price
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Which of the following statements about advertising is true?
A) Advertising is personal communication from an identified sponsor using the mass media. B) Consumers perceive advertising as always having a high level of credibility. C) Advertising can be used to suggest how to compare competing brands. D) The effect of advertising is more easily measured than the effect of sales promotions. E) Advertising always relies on factual information.
To ensure you have implemented an effective persuasive strategy, what should be done before delivering the message?
A) Outline the order of key points B) Compose the message according to the persuasive plan C) Determine medium D) Evaluate the draft E) Identify the most effective delivery method