Stover Corporation, a U.S. based importer, makes a purchase of crystal glassware from a firm in Switzerland for 39,960 Swiss francs, or $24,000, at the spot rate of 1.665 Swiss francs per dollar. The terms of the purchase are net 90 days, and the U.S. firm wants to cover this trade payable with a forward market hedge to eliminate its exchange rate risk. Suppose the firm completes a forward hedge at the 90-day forward rate of 1.682 Swiss francs. If the spot rate in 90 days is actually 1.615 Swiss francs, how much in U.S. dollars will the U.S. firm have saved or lost by hedging its exchange rate exposure? Do not round the intermediate calculations and round the final answer to the nearest cent.
A. $1,212.29
B. $926.47
C. $985.60
D. $965.89
E. $916.61
Answer: C
You might also like to view...
Project managers should encourage ________ conflict.
Fill in the blank(s) with the appropriate word(s).
Which of the following is a finding of the Treadway Commission?
a. Financial statement frauds occur very often, the average fraud lasts about two years. b. The CEO perpetrates the fraud in 72% of the cases. c. While financial statement frauds occur infrequently, they are extremely costly. d. Financial statement fraud occurs mostly in companies that are listed.
Training interventions which are enacted to fill a ‘gap’ in current capability is referred to as:
a. deficit-led b. failure-led c. problem-led d. issue-led
The average life expectancy of computers produced by Ahmadi, Inc. is 6 years with a standard deviation of 10 months. Assume that the lives of computers are normally distributed. Suggestion: For this problem, convert ALL of the units to months.
?
a.What is the probability that a randomly selected computer will have a life expectancy of at least 7 years?b.Computers that fail in less than 5 
years will be replaced free of charge. What percentage of computers are expected to be replaced free of charge?c.What are the minimum and the maximum life expectancy of the middle 95% of the computers' lives? Give your answers in months and do not round your answers.d.The company is expecting that only 104 of this year's production will fail in less than 3 years and 8 months. How many computers were produced this year?
What will be an ideal response?