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The Firm That Enters into a Futures Contract with Respect

Question 134

Multiple Choice

The firm that enters into a futures contract with respect to foreign exchange does so:


A) to offset possible loss in its collection process by a gain in the delivery process of the futures contract
B) in anticipation of an increase in the value of the currency of the country for which the contract is established Could be correct, too.Depends if they are paying or receiving.
C) to decrease the cost of their sales transactions
D) to eliminate a loss in the collection process of their accounts receivable in that country

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