Stover Corporation,a U

question 29

Multiple Choice

Stover 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 Swiss 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 Swiss francs.If the spot rate in 90 days is actually 1.64 Swiss francs,how much in U.S.dollars will the U.S.firm have saved or lost by hedging its exchange rate exposure?

• A)$399
• B)$444
• C)$493
• D)$548
• E)$608

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Definitions:

Self-Actualization

The humanistic process by which people fulfill their potential for goodness and growth.

Human Functioning

The range of human activities and capabilities, including physical, cognitive, emotional, and social aspects of life and well-being.

Humanists

Individuals who emphasize the value and goodness of human beings, preferring critical thinking and evidence over established doctrine or faith.

Cognitive-Behavioral

A treatment method that targets harmful behaviors and thought processes by combining cognitive and behavioral strategies.