Business, 07.03.2020 05:58 vc0620120

Which one of the following is a suggested method of reducing a U. S. importer's short-run exposure to exchange rate risk? Group of answer choices Entering a forward exchange agreement timed to match the invoice date Investing U. S. dollars when an order is placed and using the investment proceeds to pay the invoice

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Answer from: 767sebmont

Entering a forward exchange agreement timed to match the invoice date

Explanation:

A forward exchange agreement is a special type of foreign currency transaction between two parties to exchange two designated currencies at a specific time in the future. These agreements usually takes place on a date after the date in which the spot contract settles and are used to protect the buyer from any flunctuations in currency prices.

For a US's importer's short-run exposure to exchange rate risk to be reduced, such importer should arrange and enter into a forward exchange agreement where the contract and the invoices will be in their own currency at a specified date in the future. This will protect the importer from unexpected or adverse movements in the currencies future spot rate and shift all exchange risk from the importer on to other parties. The person who will now bear the risk will be a matter of negotiation, along with price and other payment terms.

Answer from: Quest

The business cycle is the periodic but irregular up-and-down movement in economic activity, measured by fluctuations in real gross domestic product (gdp) and other macroeconomic variables. a business cycle is typically characterized by four phases—recession, recovery, growth, and decline—that repeat themselves over time. economists note, however, that complete business cycles vary in length. the duration of business cycles can be anywhere from about two to twelve years, with most cycles averaging six years in length. some business analysts use the business cycle model and terminology to study and explain fluctuations in business inventory and other individual elements of corporate operations. but the term "business cycle" is still primarily associated with larger (industry-wide, regional, national, or even international) business trends.

Answer from: Quest

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Which one of the following is a suggested method of reducing a U. S. importer's short-run exposure t...

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