NorthRim Inc

question 51

Multiple Choice

NorthRim Inc. (NRI) , imports extreme condition outdoor wear and equipment from the Allofit Territories Company (ATC) located in Canada. With the steady decline of the U.S dollar against the Canadian dollar NRI is finding a continued relationship with ATC to be an increasingly difficult proposition. In response to NRI's request, ATC has proposed the following risk-sharing arrangement. First, set the current spot rate as the base rate. As long as spot rates stay within 5% (up or down) NRI will pay at the base rate. Any rate outside of the 5% range, ATC will share equally with NRI the difference between the spot rate and the base rate. If the current spot rate is C$1.20/$, what are the upper and lower limits for trading to take place at C$1.20?

• A) C$1.205/$ - C$1.195/$
• B) C$1.15/$ - C$1.25/$
• C) C$1.14/$ - C$1.26/$
• D) none of the above

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Definitions:

Partially Separated Circuits

Electrical circuits that share some, but not all, connections or components, allowing for partially independent operation.

Circulatory System

The body's system responsible for transporting blood, nutrients, gases, and waste products, and includes the heart and blood vessels.

Amphibian

A class of cold-blooded vertebrates that live both in water (as larvae or tadpoles) and on land (as adults), including frogs, toads, and salamanders.

Oxygen-rich

Describes an environment or substance containing high levels of oxygen, often associated with well-oxygenated blood and atmospheres conducive to aerobic life forms.