You're Hoarse from Explaining to Your Supervisor That the Cost

question 26

Multiple Choice

You're 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 2 million euro commitment if the spot rate is €1.6/$, the forward rate is €1.55/$, and the expected spot rate at the end of the hedge is €1.6/$?

• A) $0
• B) $25,000
• C) $40,323
• D)$36,667

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Definitions:

Informal Leadership

Informal leadership refers to the influence and guidance provided by individuals who may not hold formal authority or positions but are recognized as leaders by their peers.

Co-leadership

A leadership structure where two or more individuals share the role of leading an organization, team, or project.

Implicit Leadership Theory

The concept suggesting that people have ingrained beliefs and assumptions about the attributes and behaviors that make an effective leader.

Sensitivity

The quality of being responsive or susceptible to changes or the feelings of others; in a business context, it can relate to understanding market needs or team dynamics.