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Exhibit 23.2 Use the Information Below for the Following Problem(S)

question 14

Multiple Choice

Exhibit 23.2
Use the Information Below for the Following Problem(S)
Darden Industries has decided to borrow $25,000,000.00 for six months in two three-month issues. As the Treasurer, you are concerned that interest rates will rise over the next three months and the rate upon which the second payment will be based will be undesirable. (The amount of Darden's first payment will be known at origination.) To reduce the company's interest rate exposure, you decide to purchase a 3 × 6 FRA whereby you pay the dealer's quoted fixed rate of 4.5% in exchange for receiving 3-month LIBOR at the settlement date. In order to hedge her exposure, the dealer buys LIBOR from McIntire Industries at its bid rate of 4%. (Assume a notional principal of $25,000,000.00 and that there are 60 days between month 3 and month 6.)
-Refer to Exhibit 23.2.Assuming that 3-month LIBOR is 5.00% on the rate determination day,and the contract specified settlement in arrears at month 6,describe the transaction that occurs between the dealer and Darden.

Identify the impacts of price changes on factor demand and output supply.

Interpret the relationship between marginal product and factor demand.

Analyze the effects of input price changes on the firm's production choices.

Discuss the concept of weak axiom of profit maximization (WAPM) and its implications.

Definitions:

Depressed Individuals

Individuals experiencing a chronic feeling of sadness or a lack of interest, which affects their day-to-day activities.

Bipolar Disorder

A mental disorder marked by significant mood swings including manic highs and depressive lows.

Lithium

A chemical element used especially in the form of its salts as a mood-stabilizing medication, primarily in the treatment of bipolar disorder.

Prozac

A brand name for fluoxetine, a selective serotonin reuptake inhibitor (SSRI) used to treat depression and a variety of other mental health conditions.