On March 1,Suki Corporation Entered into a Firm Commitment to Purchase

question 47

Multiple Choice

On March 1,Suki Corporation entered into a firm commitment to purchase specialized equipment from the Sashimi Trading Company for ¥80,000,000 on June 1.The exchange rate on March 1 is ¥100 = $1.To reduce the exchange rate risk that could increase the cost of the equipment in U.S.dollars,Suki pays $20,000 for a call option contract.This contract gives Suki the option to purchase ¥80,000,000 at an exchange rate of ¥100 = $1 on June 1.On June 1,the exchange rate is ¥105 = $1.How much did Suki save by purchasing the call option (answers rounded to the nearest dollar) ?

• A) $20,000
• B) $27,619
• C) $47,619
• D) Suki would have been better off not to have purchased the call option.

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Definitions:

Diana Baumrind

A developmental psychologist best known for her research on parenting styles and their effects on children's development.

Parenting Styles

Describes the variations in the ways parents raise their children, traditionally categorized into authoritative, authoritarian, permissive, and uninvolved styles.

High On Control

A state or condition wherein an individual seeks or enjoys excessive power over situations or other people.

High On Warmth

Refers to a parenting or caregiving style characterized by a high level of affection, understanding, and support towards children.