A US Corporation Has Purchased Currency Call Options to Hedge a a 70,000

question 115

Multiple Choice

A U.S. corporation has purchased currency call options to hedge a 70,000 pound (£) payable. The premium is $.02 and the exercise price of the option is $.50. If the spot rate at the time of maturity is $.65, what is the total amount paid by the corporation if it acts rationally?

• A) $33,600
• B) $46,900
• C) $44,100
• D) $36,400

Understand the role and characteristics of angel investors and venture capitalists in financing small businesses.

Recognize the significance of a business's financial health and the importance of assets and collateral in securing loans.

Understand the implications of interest rates, loan terms, and the economic environment on financing decisions.

Know the criteria and considerations lenders and investors use when evaluating a small business for financing.

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Definitions:

Feeding Disorder

A condition characterized by difficulties in eating such as reduced intake or avoidance of food that can lead to nutritional deficiencies.

Eating Disorder

A group of psychological conditions marked by abnormal or disturbed eating habits that negatively affect a person's physical and mental health.

Cognitive-Behavioral Therapy (CBT)

Treatment focused on changing negative patterns of thinking and solving concrete problems through brief sessions in which a therapist helps a client challenge negative thoughts, consider alternative perspectives, and take effective actions.

Interpersonal Therapy (IPT)

More structured, short-term version of psychodynamic therapies.