Multiple Choice
Scenario: ABC Software
ABC Software is a producer of educational software for children below the age of twelve. The company has operations in Switzerland and would like to expand its foreign operations with a new facility in China.
-The company's financial advisors recommend that ABC Software conduct most of its business in a vehicle currency.Which of the following is true of vehicle currencies?
A) A vehicle currency is a contract that requires the exchange of an agreed-upon amount of a currency on an agreed-upon date at a specific exchange rate.
B) The U.S. dollar, Australian dollar, Japanese yen, and British pound are all examples of vehicle currencies.
C) The U.S. dollar became a vehicle currency after World War II when all of the world's major currencies were tied indirectly to the dollar because it was the most stable currency.
D) The Chinese yuan is expected to become a vehicle currency in the near future as China's position in world trade continues to grow.
Correct Answer:
Verified
Correct Answer:
Verified
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