Forward exchange rate can best be described as:

Select one:

a. The exchange rate used on trading currencies.

b. The idea that the exchange rate adjusts to keep purchasing power constant among currencies.

c. An agreement to trade currencies based on the exchange rate today for settlement in two days.

d. The agreed upon exchange rate to be used in a forward trade.

e. An agreement to exchange currency at some time in the future.

Question 6

Gillison Markets is being acquired by Bakersfield Ltd. for $129,000 worth of Bakersfield Ltd. stock. Bakersfield Ltd. has 7,500 shares of stock outstanding at a price of $54 a share. Gillison Markets has 1,500 shares outstanding with a market value of $27 a share. The incremental value of the acquisition is $3,700. How many new shares of stock will be issued to complete this acquisition?

Select one:

a. 8,063 shares

b. 3,186 shares

c. 2,389 shares

d. 7,209 shares

e. 4,778 shares

Question 7

Select one:

a. Short-run financial risk arising from the need to buy or sell at uncertain prices or rates in the near future.

b. Long-term financial risk arising from permanent changes in prices or other economic fundamentals.

c. A plot showing how the value of the firm is affected by changes in prices or rates.

d. Reducing a firm's exposure to price or rate fluctuations.

e. A financial asset that represents a claim to another financial asset.