Assume That You Manage a Firm That Faces Transaction Exposure

question 12

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 which you expect to receive in 90 days.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:

Foley Catheter

A flexible tube inserted into the bladder to drain urine.

Urethral Damage

Injury or harm to the urethra, the tube that carries urine from the bladder out of the body, which can lead to difficulty in urination or urinary incontinence.

Large Catheters

Medical devices inserted into body cavities, ducts, or vessels to allow for drainage, administration of fluids, or access by surgical instruments.

Catheterized

The process of inserting a catheter into a bodily cavity, duct, or vessel to allow for the drainage or injection of fluids.