Exhibit 23.3 Use the Information Below for the Following Problem(S)

question 37

Multiple Choice

Exhibit 23.3
Use the Information Below for the Following Problem(S)
Chimichango Industries has decided to borrow $50,000,000.00 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 Chimichango'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 5.91% in exchange for receiving 3-month LIBOR at the settlement date. In order to hedge her exposure, the dealer buys LIBOR from Megabuks Industries at its bid rate of 5.85%. (Assume a notional principal of $50,000,000.00 and that there are 60 days between month 3 and month 6.)
-Refer to Exhibit 23.3.Assuming that 3-month LIBOR is 5.6% on the rate determination day,and the contract specified settlement in arrears at month 6,describe the transaction that occurs between the dealer and Megabuks.

• A) The dealer is obligated to pay Megabuks $38,750.
• B) The dealer is obligated to pay Megabuks $31,250.
• C) Megabuks is obligated to pay the dealer $38,750.
• D) Megabuks is obligated to pay the dealer $31,250.
• E) None of the above.

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Definitions:

Personal Initiative

The proactive and self-starting approach to work that involves taking action beyond what is required or expected.

Autonomy Support

Practices and attitudes that foster a sense of voluntary control over one’s actions, encouraging self-initiation and personal endorsement of one’s behavior.

Basic Psychological Needs

Fundamental requirements for psychological well-being, often including autonomy, competence, and relatedness.

Process Theories

Theories that focus on understanding how specific processes contribute to the motivation, behavior, and performance of individuals.