Refer to the Previous Two Questions

question 2

Multiple Choice

Refer to the previous two questions. What is the euro gain or loss assuming that future conditions described in Case 2 actually occur? (Ignore commissions and margin costs, and assume a naive hedge ratio.)

• A) €2 965 000.00 gain
• B) €45 500.00 gain
• C) €2 965 000.00 loss
• D) €45 500.00 loss
• E) None of the above

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Definitions:

Conversion Formulas

Equations used to convert a quantity from one unit of measurement to another.

Centimeters

A metric unit of length equal to one hundredth of a meter.

Dimensional-Analysis

A method in physics and engineering to check the consistency of equations and to perform unit conversions.