Which of the following does not represent an exchange risk on an exposed position to a company transacting business with a foreign vendor?
a. transaction is denominated in foreign currency, settled at a future date
b. firm commitment to purchase inventory to be paid for in foreign currency
c. Forecasted foreign currency transaction with a high probability of occurrence
d. firm commitment to purchase inventory denominated in U.S. dollars
d
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Total debt must always be equal to the sum of temporary, permanent, and spontaneous sources of
financing. Indicate whether the statement is true or false
Suppose that David's only assets are an automobile worth $10,000 and a checking account with a $5,000 balance. His only liabilities are a student loan balance of $12,000 and a balance of $9,000 on his car loan. What is his net worth?
A) $21,000 B) $15,000 C) $6,000 D) Doug is currently insolvent with $6,000 negative net worth. E) None of the above statements are correct.