Scenario - Aero,Inc. Aero,Inc.started from the Idea of Brad Aerostle of Madison,South Dakota

question 51

Multiple Choice

Scenario - Aero,Inc.
Aero,Inc.started from the idea of Brad Aerostle of Madison,South Dakota in 1992.Brad earned a financial degree from Harvard and had watched the financial markets for years.Armed with college credentials and knowledge,he believed he could offer needed services to individuals and companies desiring to conduct business around the globe.From the minute Brad put his idea into motion,his brainchild - Aero,Inc.- proved quite profitable.
Aero,Inc.currently has over five thousand clients ranging from slightly wealthy individuals to very rich and thriving corporations around the world.Brad's skill at what he does has made his company a sought out firm by those who want to prosper in the foreign marketplace.
-One of the prominent concerns the clients of Aero,Inc.express is that of currency fluctuations.The clients know fluctuations in currency can wind up costing them money.Aero,Inc.alleviates its clients concern by suggesting the client enter into a situation where currencies can be exchanged at a previously agreed exchange rate as a way to hedge exchange rate movements.Which one of the following best identifies what Aero,Inc.is likely suggesting?

• A) Currency swap
• B) Call option
• C) Sensitivity analysis
• D) Speculation
• E) Diversification

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Definitions:

Impulse Control

The ability to resist urges or impulses that may harm oneself or others, often discussed in the context of psychological disorders.

Serotonin

A neurotransmitter that contributes to feelings of well-being and happiness, and is involved in the regulation of mood, appetite, and sleep.

Aggression

Behaviors or actions taken with the intention of causing harm or exerting dominance over another, which can be physical, verbal, or non-verbal.

Neurotransmitters

Chemical messengers in the nervous system that transmit signals between neurons, or from neurons to muscles.