Instruction 9.2: Use the Information for Following Problem(s)

question 7

Multiple Choice

Instruction 9.2:
Use the information for following problem(s) .
Oregon Transportation Inc. (OTI) has just signed a contract to purchase light rail cars from a manufacturer in Germany for euro 2,500,000. The purchase 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, OTI 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
∙ OTI's 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 call options for euro 625,000; strike price $1.42, premium price is 1.5%
∙ OTI's forecast for 6-month spot rates is $1.43/euro
∙ The budget rate, or the highest acceptable purchase price for this project, is
$3,625,000 or $1.45/euro
-Refer to Instruction 9.2. OTI would be ________ by an amount equal to ________ with a forward hedge than if they had not hedged and their predicted exchange rate for 6 months had been correct.

• A) better off; $125,000
• B) better off; euro 125,000
• C) worse off; $125,000
• D) worse off; euro 125,0000

Describe the stages of social movements and the factors leading to their conclusion.

Analyze the role of social media in the development and spread of social movements using specific examples.

Identify and explain the two classes of social dilemmas.

Differentiate between social movements organized around regressive and progressive social change, with examples.

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Definitions:

Limbic System

A complex system of nerves and networks in the brain, involved with instinct and mood, controlling basic emotions and drives.

Age-Related Timing

The schedule or timing of events that is influenced by a person's age or the aging process.

Developmental Milestones

Specific skills or abilities that most children can do by a certain age, used to track physical, mental, emotional, or social development.

Sequence

A specific order in which related events, movements, or things follow each other.