Short-term foreign exchange forecasts are often motivated by such activities as ________ whereas long-term forecasts are more likely motivated by ________.
A) long-term investment; long-term capital appreciation
B) long-term capital appreciation; desire to hedge a receivable
C) the desire to hedge a payable; the desire for long-term investment
D) the desire for long-term investment; the desire to hedge a payable

Question

Quizplus · Accepted Answer

Short-term foreign exchange forecasts are typically motivated by immediate needs such as the desire to hedge a payable, reflecting a company's need to manage its short-term financial commitments and currency exposure. In contrast, long-term forecasts are driven by broader investment strategies, such as the desire for long-term investment, where companies look to assess and manage their exposure to currency fluctuations over a longer period to support strategic investment decisions.

Short-Term Foreign Exchange Forecasts Are Often Motivated by Such Activities