Question
5) Which of the statements below is FALSE? A) Forward rates play an important part in currency exchange because you can lock in future currency
5) Which of the statements below is FALSE?
A) Forward rates play an important part in currency exchange because you can lock in future currency exchanges with these forward rates.
B) When you convert your currency today, you are exchanging currency in the spot market.
C) The International Fisher effect tells us that inflation rates are the same the world over.
D) From a business perspective, forward contracts are hedging tools for companies. By locking in a future exchange rate, companies can avoid unfavorable movements in exchange rates.
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
12th edition
978-0324597714, 324597711, 324597703, 978-8131518571, 8131518574, 978-0324597707
