Forward transactions would be useful to
A)a government wanting to know the size of its future debt.
B)a household wanting to reduce its future tax liability.
C)a business wanting to know the cost of its funds on future loans.
D)a business wanting to expand its operations in overseas markets.

Question

Quizplus · Accepted Answer

Forward transactions allow businesses to lock in the cost of future loans, which is useful in determining their cost of funds. It is not useful for a government to know the size of its future debt or for a household to reduce its future tax liability. Forward transactions can be used by businesses to expand their operations overseas, but this is not the best fit for the given options.

Forward Transactions Would Be Useful to