The Following Is an Example of Radio Shack Hedging Its

question 34

Multiple Choice

The following is an example of Radio Shack hedging its foreign currency risk:

• A) needing to pay 9,000 yen per radio to its suppliers in a month, Radio Shack makes a forward-exchange deal to buy yen.
• B) needing to pay 9,000 yen per radio to its suppliers in a month, Radio Shack makes a forward-exchange deal to sell yen.
• C) needing to pay 9,000 yen per radio to its suppliers in a month, Radio Shack buys yen at a spot-exchange 1 month from now.
• D) needing to pay 9,000 yen per radio to its suppliers in a month, Radio Shack sells yen at a spot-exchange 1 month from now.
• E) needing to pay 9,000 yen per radio to its suppliers in a month, Radio Shack sells yen in a forward-exchange deal.

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Definitions:

Mechanoreceptors

Sensory receptors that respond to mechanical pressure or distortion, playing a key role in the sense of touch and hearing.

Genetic Mutation

A change in the DNA sequence that can lead to different genetic traits, potentially causing various diseases or conditions.

Chemoreceptors

Sensory receptors that detect chemical stimuli, either from the environment or within the body, and transmit this information to the nervous system.

Proprioceptors

Sensory receptors, found chiefly in muscles and tendons, that detect the motion or position of the body or a limb by responding to stimuli originating within the organism.