You Have Decided to Hedge Your Exchange-Rate Risk in Your

question 17

Multiple Choice

You have decided to hedge your exchange-rate risk in your U.S.-based firm by contracting forward to buy 500,000 Swiss Francs for delivery in one year.The current exchange rate is Sf1.6/$.The forward rate is Sf1.7/$(U.S.) .How much better (worse) off are you if you don't buy the forward contract and instead pay the spot rate in one year if it turns out to be Sf1.65/$?

• A)($14,245)
• B)($8,912)
• C)$8,912
• D)$27,472

Design and apply interventions aimed at developing members' interpersonal relationships and social networks.

Utilize mindfulness and other cognitive techniques to support group members' intrapersonal development and mental health.

Understand the key principles and strategies of integrative negotiation.

Identify the importance of firm flexibility alongside being open to various solutions in negotiations.

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Definitions:

Accounts Receivable

Money owed to a business by its clients for goods or services that have been delivered or sold but not yet paid for.

Cash Amount

The total value of cash on hand or in bank accounts, easily accessible for immediate use by the business.

Cost of Merchandise Sold

The direct costs attributable to the goods sold by a company, including purchase price, freight, storage, and packaging.

Inventories

Assets held for sale in the ordinary course of business, or in the process of production for such sale, or in the form of materials or supplies to be consumed in the production process.