A noncancelable sales order that specifies foreign currency price and date of delivery is known as a:
A) hedge.
B) foreign currency firm commitment.
C) forward contract.
D) put option.

Question

Quizplus · Accepted Answer

A noncancelable sales order that specifies foreign currency price and date of delivery is known as a foreign currency firm commitment. This is a binding agreement that cannot be cancelled and involves a transaction in a foreign currency, making it a foreign currency firm commitment. A hedge is a risk management strategy used to mitigate the risk of potential losses in other investments. A forward contract is an agreement to buy or sell an asset at a specified price and date in the future. A put option gives the holder the right, but not the obligation, to sell an asset at a specified price and date in the future.

A Noncancelable Sales Order That Specifies Foreign Currency Price and Date