24-89 at the End of the Year,LIBOR Is 4 Percent

question 21

Multiple Choice

24-89 At the end of the year,LIBOR is 4 percent and the exchange rate is $1.50/£.What is the net payment paid or received in dollars by the U.S.bank?

• A)The U.S.bank paid $12 million and received $8 million for a net payment of $4 million.
• B)The U.S.bank paid $12 million and received $10 million for a net payment of $2 million.
• C)The U.S.bank paid $12 million and received $12 million for a net receipt of $0 million.
• D)The U.S.bank paid $12 million and received $14 million for a net receipt of $2 million.
• E)The U.S.bank paid $12 million and received $16 million for a net receipt of $4 million.

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Definitions:

Increase

A rise in quantity, size, or degree.

Contingency of Reinforcement

A concept in behavioral psychology where the delivery of reinforcement depends on specific conditions or behaviors being met.

Behavioral Modification

A method of changing behavior through various techniques such as positive or negative reinforcement, primarily used in treatment and therapy.

Consequence

The result or effect of an action or condition, often one that is negative or undesirable.