International Business Opportunities and Challenges Study Set 2
Quiz 7 :
Foreign Exchange and the Global Capital Markets
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Q41 Q41 Q41
If a European company opts to buy shirts from India with payment due in 60 days, it would be able to access the forward market to enter into a contract to lock in a future price for its payment. This would enable the European firm to protect itself against depreciation of the euro, which would require more euros to buy one Indian rupee. This contract is referred to as a(n):
Q51 Q51 Q51
A movie production house makes a gross profit of $10 million from a movie release. If the company spends $4 million, including taxes and all expenses, then it has $6 million in profits. The company can invest the $6 million in the bonds of a company. Making such an investment is riskier than keeping the $6 million in a savings account. The financial officer hopes that over the long term, the investment will yield greater returns than cash holdings or interest on a savings account. This is an example of a form of: