Assume That You Manage a Firm That Faces Transaction Exposure

question 18

Multiple Choice

Assume that you manage a firm that faces transaction exposure. Your company manufactures and sells tricycles around the world. You just completed a large sale of tricycles to a chain of stores in Sweden and received a promised payment of 1,000 krona per tricycle. You have already sold 3,000 tricycles and are now awaiting payment. The exchange rate today is 7.5 krona per dollar. Over the next ninety days the indirect exchange rate unexpectedly moves from 7.5 to 7.7. 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 400,000 dollars
• B) 3,000,000 kronas and about 389,610 dollars
• C) 3,176,529 kronas and about 389,610 dollars
• D) 3,000,000 kronas and about 300,000 dollars

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Definitions:

Staff Nurse Position

A staff nurse position is a role within a healthcare setting responsible for providing direct patient care and supporting medical procedures.

General Adaptation System

A model describing the body's short-term and long-term reactions to stress, formulated by Hans Selye.

Myocardial Infarction

A medical term for a heart attack, resulting from the blockage of blood flow to a part of the heart, causing heart cells to die due to lack of oxygen.

Resistance Stage

A phase of the general adaptation syndrome in which the body tries to adapt to a stressor and maintain homeostasis, following the initial alarm reaction stage.