Sunware Corporation, a U

question 25

Multiple Choice

Sunware Corporation, a U.S. based importer, makes a purchase of crystal glassware from a firm in Switzerland for 39,960 Swiss francs or $24,000, at the spot rate of 1.665 francs per dollar. The terms of the purchase are net 90 days, and the U.S. firm wants to cover this trade payable with a forward market hedge to eliminate its exchange rate risk. Suppose the firm completes a forward hedge at the 90-day forward rate of 1.682 francs. If the spot rate in 90 days is actually 1.638 francs, how much will the U.S. firm have saved in U.S. dollars by hedging its exchange rate exposure?

• A) -$396
• B) -$243
• C) $ 0
• D) $243
• E) $638

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Definitions:

Vitreous Humor

A transparent, gel-like substance filling the eyeball behind the lens, maintaining eye shape and optical properties.

Intraocular Pressure

The fluid pressure inside the eye, important for the eye's health and function.

Viscous

Having a thick, sticky consistency between solid and liquid; having a high resistance to flow.

Optic Disc

The point in the eye where the optic nerve meets the retina, also known as the blind spot, as it contains no photoreceptor cells.