A UScompany That Imports Laptop Computers from Japan Knows That in in 30

question 26

Multiple Choice

A U.S.company that imports laptop computers from Japan knows that in 30 days it must pay in yen to a Japanese supplier when a shipment arrives.The company will pay the Japanese supplier ×150,000 for each computer,and the current dollar/yen spot exchange rate is $1 = ×110.The importer can sell the computers the day they arrive for $1,600 each.However,the importer will not have the funds to pay the Japanese supplier until the computers have been sold.The importer enters into a 30-day forward exchange transaction with a foreign exchange dealer at $1 = ×105.Which of the following will happen if the exchange rate after 30 days is $1 = ×90?

• A)The importer will earn a profit of approximately $236 per computer.
• B)The importer will earn a profit of approximately $171 per computer.
• C)The importer will earn a profit of approximately $65 per computer.
• D)The importer will incur a loss of approximately $67 per computer.
• E)The importer will incur a loss of approximately $105 per computer.

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Definitions:

Unequally Distributed

The condition in which resources, power, or opportunities are not shared equitably among all parties or individuals involved.

Uncertainty-avoidance Cultures

Cultures that have a low tolerance for ambiguity and uncertainty, often favoring strict rules and conventions to minimize the unpredictability of social interactions.

Ambiguous Situations

Scenarios or circumstances that lack clarity or have multiple interpretations, often leading to confusion or complexity in decision-making.

Stable Rules

Regulations or principles that remain constant and unchanged over time.