You Are Hoarse from Explaining to Your Supervisor That the Cost

question 1

Multiple Choice

You are hoarse from explaining to your supervisor that the cost, if any, of hedging exchange-rate risk can be thought of as an insurance premium to avoid surprises.What is the cost of hedging a €2 million commitment if the spot rate is €1.6/$, the forward rate is €1.55/$, and the expected spot rate at the end of the hedge is €1.6/$?

• A)$0
• B)$25,000
• C)$40,323
• D)$68,966

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Definitions:

Ainsworth Strange Situation

A sequence of staged episodes that illustrate the strength of attachment between a child and (typically) his or her mother.

Secure Attachment Assessment

The evaluation of an individual's ability to form healthy and resilient relationships, based on feelings of security and trust.

Harlow Comfort Comparison

A series of experiments by Harry Harlow demonstrating the importance of comfort and care, over mere nourishment, in the attachment process of rhesus monkeys.

Bowlby Caregiver Analysis

Bowlby caregiver analysis is a psychological framework that explores the bond between caregivers and children, emphasizing the importance of attachment for emotional development.