Samsong Inc

question 56

Multiple Choice

Samsong Inc.needs €1,000,000 in 30 days.Samsong can earn 5 percent annualized on a German security.The current spot rate for the euro is $1.00.Samsong can borrow funds in the U.S.at an annualized interest rate of 6 percent.If Samsong uses a money market hedge to hedge the payable,what is the cost of implementing the hedge

• A) $1,000,000.
• B) $1,055,602.
• C) $1,000,830.
• D) $1,045,644.

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Definitions:

Cultural Miscues

Misunderstandings or errors in communication that occur due to differences in cultural norms and expectations.

International Business

Commercial transactions and activities that occur across national borders.

Transnational Corporation

A global corporation or multinational enterprise that operates worldwide on a borderless basis.

Multinational Corporation

A company that operates in multiple countries, managing production or delivering services in more than one country beyond its home base.