A firm must make a large future payment in a foreign currency and wants to hedge the associated exchange rate risk. Which one of the following identifies the cost of such a hedge?
A. difference between expected and current forward rates
B. difference between expected and current spot rates
C. difference between the forward premium and the forward discount
D. difference between the forward rate and the expected future spot rate
Answer: D
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Which of the following is NOT a form of direct marketing?
A) mass marketing B) catalogs C) direct mail D) telemarketing E) m-commerce
Political and legal pluralism can make cross cultural negotiations more complex because
A. there may be implications for the taxes that the organization pays. B. there may be different codes of contract law and standards of enforcement. C. there may be implications for the labor codes or standards that the organization must meet. D. All of these options can make cross cultural negotiations more complex.
Scranton, Inc. reports net income of $251,000 for the year ended December 31. It also reports $96,800 depreciation expense and a $6050 gain on the sale of equipment. Its comparative balance sheet reveals a $39,700 decrease in accounts receivable, a $17,850 increase in accounts payable, and a $13,900 decrease in wages payable. Calculate the cash provided (used) in operating activities using the indirect method.
A. $385,400. B. $391,450. C. $349,700. D. $288,800. E. $413,200.
Which of the following could cause the volatility smile typically seen for foreign currency options?
A. Currencies are traded in different countries at different times of the day B. Currencies tend to have low volatilities C. The activities of central banks causes occasional jumps in the exchange rate D. Interest rates may be different in the two countries