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Verizon [17]
4 years ago
9

Assume that Parker Co. will receive SF200,000 in 360 days. Assume the following interest rates: U.S. Switzerland 360-day borrowi

ng rate 7% 5% 360-day deposit rate 6% 4% Assume the forward rate of the Swiss franc is $.50 and the spot rate of the Swiss franc is $.48. If Parker Co. uses a money market hedge, it will receive ____ in 360 days.
a. $101,904
b. $101,923
c. $98,769
d. $96,914
e. $92,307
Note– remember from class how we hedge receivables (that is borrow in the country where the receivables will be received)
Business
1 answer:
frez [133]4 years ago
3 0

Answer:

d. $96,914

Explanation:

Parker Co. can execute money market hedge in following steps:

(1) Parker Co. pledges Receivable of SF200,000 to borrow SF190,476 with rate 5% in Switzerland; SF190,476 = SF200,000/ (1+5%)

so it has to pay interest expense of SF9,524 in 360 days. The receivable of SF200,000 is enough for both principal and interest in 360 days.

(2) Then it sells SF190,476 at spot rate $0.48 to get $91,428

(3) Then it deposits $91,428 in US with rate 6% to get back $96,914 in 360 days ; $96,914 = $91,428 * (1+6%)

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Dmitriy789 [7]

Answer:

The North American Free Trade Agreements

Explanation:

The reason is that the free trade agreements eliminates the price escalation which is imposed by the other countries on importing these goods. So as a result the market becomes less attractive to the company because its product are not able to compete in that environment. The FTA helps organizations to use the resources of other countries with which the country has free trade agreements to lower its costs to compete competitors. The vital resource in Mexico is cheap labor cost and America has one of the best technologies in the world.

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4 years ago
If the prices of X and Y are $2 and $4 per unit, respectively, and this consumer has $10 in income to spend, to maximize total u
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Answer:

In this case the consumer needs to buy one unit of X good and 2 units of Y goods to maximize total utility.

Explanation:

In order to maximize total unity, the consumer needs to buy buy one unit of X good and 2 units of Y. This combination of goods will give the total satisfaction to the consumer with its available resources.

Utility is a meaning, which is used in economics. Which is used for satisfaction and fulfillment. That a consumer receives from the consumption of a particular product or service.

Total utility is the overall or total satisfaction a customer receives through taking a specific good or service.

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4 years ago
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Answer: A. Analyze the situation.

Explanation: Took the test

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defining and implementing monetary policy. conducting foreign exchange operations. holding and managing the euro area's foreign currency reserves. promoting the smooth operation of payment systems.

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Foreign exchange reserves are a country's emergency funds in the event of an emergency, such as a rapid depreciation of its currency. Countries use foreign currency reserves to maintain a fixed rate of value, maintain competitively priced exports, remain liquid in the event of a crisis, and provide investors with confidence.

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than is run over by a car and left lying in the street. Sam, seeing Nathan’s helpless state, places him in his car for the pur
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Answer:

If Nathan's additional injuries were severe, then Sam is probably liable for negligence.

Explanation:

There is no law that forces someone to help another person in peril, you have the legal obligation to call for help (usually 911), but your obligation ends there. If you decide to help someone, then you are responsible for that person's well being and must exercise reasonable care. Even if you are not a properly trained rescuer, you have the obligation to not make the victim worse. If Nathan's health suffered due to Sm's negligence, then Sam is liable to him.

This is a reason why you have to think twice before assisting someone in peril since once you decide to be a rescuer, then you are liable for any bad consequences that may occur. For example, if you are trying to help someone out of a car after an accident, an that person's leg or arm is broken in the process, then you may be liable for it.

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