Question: 1 . Which of the following is not correct? Choices: Premium arises when the spot rate is higher than that of the forward rate Indirect quotation shows the number of units of a domestic currency corresponding to one unit of foreign currency Financial effects of possible stock market crashes can be mitigated through purchasing and holding golds Exchange rates is one of the vital factors in considering whether or not to invest in a security issued by entities from the other countries 2 . Which is not true with regards to risk management? Choices: Bankruptcy that arises from volatility of cash inflows can be mitigated through proper risk forecast and management Securities may be subjected to security price risk One of the ways to mitigate relevant risk is to increase the probability of occurrence of an adverse event Identifying the risk that the firm faces is the first step in risk management
Question: 1 . Which of the following is not correct? Choices: Premium arises when the spot rate is higher than that of the forward rate Indirect quotation shows the number of units of a domestic currency corresponding to one unit of foreign currency Financial effects of possible stock market crashes can be mitigated through purchasing and holding golds Exchange rates is one of the vital factors in considering whether or not to invest in a security issued by entities from the other countries 2 . Which is not true with regards to risk management? Choices: Bankruptcy that arises from volatility of cash inflows can be mitigated through proper risk forecast and management Securities may be subjected to security price risk One of the ways to mitigate relevant risk is to increase the probability of occurrence of an adverse event Identifying the risk that the firm faces is the first step in risk management
Chapter20: Short-term Financing
Section: Chapter Questions
Problem 2QA
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Question:
1 . Which of the following is not correct?
Choices:
- Premium arises when the spot rate is higher than that of the forward rate
- Indirect quotation shows the number of units of a domestic currency corresponding to one unit of foreign currency
- Financial effects of possible stock market crashes can be mitigated through purchasing and holding golds
- Exchange rates is one of the vital factors in considering whether or not to invest in a security issued by entities from the other countries
2 . Which is not true with regards to risk management?
Choices:
- Bankruptcy that arises from volatility of
cash inflows can be mitigated through proper riskforecast and management - Securities may be subjected to security price risk
- One of the ways to mitigate relevant risk is to increase the probability of occurrence of an adverse event
- Identifying the risk that the firm faces is the first step in risk management
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