Suppose You Are a U

question 55

Multiple Choice

Suppose you are a U.S. exporter expecting to receive a payment of NZD₁,000 (New Zealand dollars) in 12 months. The annual interest rate on NZD deposits is 5 percent, and the annual interest rate on dollar deposits is 9 percent. If the present exchange rate is $0.50 per NZD and interest rate parity holds, how many dollars do you expect to receive at the maturity date of the export contract?

• A) $2,000
• B) $1,923
• C) $1,000
• D) $580
• E) $520

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Definitions:

Conflicts

Situations where interests, needs, goals, or values of involved parties interfere with one another.

Subordinates

Individuals who work under the supervision of someone else in an organizational hierarchy.

Chain Of Command

The chain of command links all persons with successively higher levels of authority.

Mixed Message

Communication that contains conflicting or ambiguous information, often leading to misunderstanding or confusion.