Assume That You Manage a Firm That Faces Transaction Exposure

question 109

Multiple Choice

Assume that you manage a firm that faces transaction exposure.Your company manufactures and sells scooters around the world.You just completed a large sale of scooters to a chain of stores in Sweden and received a promised payment of 1,100 krona per scooter.You have already sold 2500 scooters and are now awaiting payment which you expect to receive in 90 days.The exchange rate today is 7.5 krona per dollar.Over the next ninety days the indirect exchange rate unexpectedly moves from 8.4 to 8.7.What will be your sales receipt in krona,and what amount of dollars will these kronas convert to at the indirect exchange rate?

• A)3,000,000 kronas and about 364,000 dollars
• B)2,750,000 kronas and about 316,092 dollars
• C)3,176,529 kronas and about 389,610 dollars
• D)2,7500,000 kronas and about 300,482 dollars

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Definitions:

Genetic Inheritance

The process by which genetic information is passed on from parents to their offspring, determining particular traits.

Environmental Learning

The acquisition of knowledge, skills, or attitudes as a result of interaction with one's surroundings or environment.

Prenatal Development

The process of growth and development within the womb from conception until birth.

Factors Affecting

Variables or conditions that can influence the outcome or behavior in various contexts, such as environmental, social, or psychological elements.