You Are Hoarse from Explaining to Your Supervisor That the Cost

question 94

Multiple Choice

You are hoarse from explaining to your supervisor that the cost, if any, of hedging exchange-rate risk can be thought of as an insurance premium to avoid surprises.What is the cost of hedging a DM2 million commitment if the spot rate is DM1.6/$, the forward rate is DM1.55/$, and the expected spot rate at the end of the hedge is DM1.6/$?

• A)$0
• B)$25,000
• C)$40,323
• D)$68,966 current Dollar commitment =

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Definitions:

Influenza Immunization

Vaccination designed to protect against the influenza virus, recommended annually to prevent flu infection.

Hearing Loss

A partial or total inability to hear sounds in one or both ears, which can be temporary or permanent, and may affect quality of life.

Communicating Strategies

Techniques and methods used to convey information, thoughts, or feelings effectively to others.

Speak Loudly

The act of increasing one's voice volume to ensure audibility, especially in situations where background noise is present or when communicating with individuals with hearing difficulties.