Solved

Use the Information for the Following Problem(s)

question 3

Multiple Choice

Use the information for the following problem(s) .
Plains States Manufacturing has just signed a contract to sell agricultural equipment to Boschin, a German firm, for euro 1,250,000. The sale was made in June with payment due six months later in December. Because this is a sizable contract for the firm and because the contract is in euros rather than dollars, Plains States is considering several hedging alternatives to reduce the exchange rate risk arising from the sale. To help the firm make a hedging decision you have gathered the following information.
• The spot exchange rate is $1.40/euro
• The six month forward rate is $1.38/euro
• Plains States' cost of capital is 11%
• The Euro zone 6-month borrowing rate is 9% (or 4.5% for 6 months)
• The Euro zone 6-month lending rate is 7% (or 3.5% for 6 months)
• The U.S. 6-month borrowing rate is 8% (or 4% for 6 months)
• The U.S. 6-month lending rate is 6% (or 3% for 6 months)
• December put options for euro 625,000; strike price $1.42, premium price is 1.5%
• Plains States' forecast for 6-month spot rates is $1.43/euro
• The budget rate, or the lowest acceptable sales price for this project, is $1,075,000 or $1.35/euro
-Refer to Instruction 9.1. Plains States could hedge the Euro receivables in the money market. Using the information provided, how much would the money market hedge return in six months assuming Plains States reinvests the proceeds at the U.S. investment rate?

Understand the principles of effective discipline, including guidelines to follow.

Comprehend the concept and purpose of decision-making leave and positive discipline in the workplace.

Identify the role of counseling and Employee Assistance Programs (EAPs) in rehabilitating troubled employees.

Recognize the importance of confronting troubled employees with evidence and providing them a fair chance to respond.

Definitions:

Collective Unconscious

A concept in Jungian psychology referring to the part of the unconscious mind that is shared among beings of the same species, containing universal experiences.

Trait Approach

A method in psychology used to study personality, focusing on the identification and measurement of specific psychological characteristics.

Personality

A unique set of emotional, thought, and behavioral patterns that define an individual's character and influence their interaction with the environment.

Rational

Based on reason or logic; capable of making reasoned decisions.