Your Firm Has Just Tendered for a Contract in Japan

question 118

Essay

Your firm has just tendered for a contract in Japan.You won't know for 3 months whether you get the contract but if you do, you will receive a payment of 10 million yen a year from now on.You are worried that if the yen declines in value, the dollar value of this payment will be less than you expect and the project could even show a loss.Discuss the possible ways that you could protect the firm against a decline in the value of the yen.Illustrate the possible outcomes if you do get the contract and if you don't.

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Definitions:

Data

A record of an observation or an event such as a test score, a grade in math class, or response time.

Personal Pizzas

Small-sized pizzas intended for individual consumption, often customizable with a variety of toppings.

Median

The middle value in a data set when it is arranged in ascending or descending order.

Midpoint

The value that lies exactly in the middle of a data set when it is ordered, or the central point of a line segment.