Question 1

Alliantz Company, a USA-based manufacturer needs to set up a hedge to protect against dollar exchange rate devaluation. The protection is necessary (or an open balance of $2 478.450 Payment is to be settled in a rare currency 40 days from today excluding transaction fees which investment instrument would be used to provide the best hedge?

Options :

A : Stock options

B : Market-traded futures

C : Forward agreement

D : Currency warrant

Answer: C

Question 2

A co league claims that morality is usually perceived and interpreted differently by different people so there is no method to judge whether one decision is better than another. This is commonly referred to as

Options :

A : ethical relativity

B : moral philosophy

C : comparative ethics

D : moral relativism

Answer: D

Question 3

As the number of stocks in a portfolio increases, unsystematic risk

Options :

A : decreases and systematic risk decreases

B : increases, and systematic risk increases

C : decreases and systematic risk does not change

D : increases, and systematic risk does not change

Answer: C

Question 4

IF a company does not have a code of conduct, the company most likely

Options :

A : is missing important guidance on ethical decision making

B : will lack an expressed statement of values regarding ethical behavior

C : can use its statement of values instead to implement ethics in daily decision making

D : must find another way to express its ethical principles

Answer: A

Question 5

A company can by identical raw materials from four suppliers. Each supplier offers a different term of sale. Which one of the following terms of sale has the highest effective annual interest rate if the company does not take the cash discount?

Options :

A : 1/10, net 90

B : 1/30, net 90

C : 1/10, net 45

D : 1/30 net 45

Answer: D