The Following Exchange Rates Existed Between the U

question 38

Multiple Choice

The following exchange rates existed between the U.S. dollar and the Canadian dollar at a given point in time:
-If an American firm expects to receive payment in Canadian dollars 90 days from now and is concerned that the spot exchange rate in 90 days will be less than U.S. $0.7016, it should

• A)agree to buy Canadian dollars forward at the exc
• B)agree to deliver Canadian dollars 90 days from now in exchange for by selling the Canadian dollars forward.
• C)agree to buy 1.4253 U.S. dollars 90 days from now in exchange for 0.7016 Canadian dollars.
• D)agree to deliver 1.4253 U.S. dollars 90 days from now in exchange for 0.7016 Canadian dollars.

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Definitions:

Opponent-Process Theory

A psychological and neurological model that explains how the perception of colors results from opposing neural processes.

Chromatic/Achromatic

Refers to colors with hue (chromatic) and without hue (achromatic), such as black, white, and grays.

Opponent-Process Pairs

A theory suggesting that the human visual system interprets colors in an antagonistic way, through pairs of colors opposite each other on the color spectrum.

Young-Helmholtz Theory

A theory of color vision proposing that the human eye perceives color because it has three types of receptors, each sensitive to red, green, or blue light.