Question

If a firm insures itself against foreign exchange risk, it is engaging in countertrade arbitrage currency speculation. forecasting hedging. QUESTION 19 If the exchange rate between the euro and the dollar is €1.00 = $1.10, and an American tourist in France is buying a product whose price is €50, how much in U.S. dollars would the tourist have to pay for the product? $45.00 $50.00 $45.45 $55.00 $50,50

Answer 1

1 .e.hedging.

(hedging can be selected)

If a firm insures itself against foreign exchange risk, it is engaging in hedging.

counter trade means the foreign trade is done by exchanging goods.

currency speculation means trying to gain from currency fluctuations.

arbitrage is trying to gain from the knowledge of the operation of market forces.

question 19.

D.$55.00.

since 1 euro = 1.1 dollar

50 euros will be = 50*1.1 =>$55.