​Assume Jelly Corporation, a U

question 28

Multiple Choice

​Assume Jelly Corporation, a U.S.-based MNC, obtains a one-year loan of 1,500,000 Malaysian ringgit (MYR) at a nominal interest rate of 7 percent. At the time the loan is extended, the spot rate of the ringgit is $.25. If the spot rate of the ringgit in one year is $.28, the dollar amount initially obtained from the loan is $____, and the MNC needs $____ to repay the loan.

• A) ​375,000; 449,400
• B) ​449,400; 375,000
• C) ​6,000,000; 5,357,143
• D) ​5,357,143; 6,000,000

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Definitions:

Consumption

Consumption refers to the use of goods and services by households for personal satisfaction or living standards.

Credit Availability

Refers to the ease with which individuals or businesses can obtain loans or credit from financial institutions.

Durable Goods

are items with a long life expectancy, such as automobiles, furniture, and appliances, typically used over years rather than consumed quickly.

Disposable Income

The accessible funds for households intended for saving and spending, after subtracting taxes on income.