What Was the Overall Result of Having Entered into This

question 75

Multiple Choice

What was the overall result of having entered into this hedge of exposure to foreign exchange risk?

• A) $0
• B) $9,000 net loss on the option.
• C) $9,000 net gain on the option.
• D) $2,000 net gain on the option.
• E) $2,000 net loss.

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Definitions:

Inferior Good

A type of good for which demand decreases as the income of consumers increases, inversely related to the consumer's income.

Complementary Good

A product that is consumed with another product, where demand for one increases demand for the other.

Normal Good

A good for which demand increases as the income of consumers increases.

Supply Curve

The supply curve is a graphical representation showing the relationship between the quantity of a good that producers are willing to sell and the price of the good.