1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
attashe74 [19]
3 years ago
10

Exchange rate is currently $1.25 US per 1 Euro. Interest rate is 2% in the US and 1% in Eurozone. A bank is long a futures contr

act on 1,000,000 Euro with F= $1.20 per unit, maturing in one year. What position should the bank take to hedge the currency risk?
a. Borrow $1,237,624 US
b. Invest $990,099 U.S.
c. Invest $1,237,624 US
d. Borrow $990,099 US
Business
1 answer:
kolbaska11 [484]3 years ago
8 0

Answer:

Invest $990,099 U.S

Explanation:

The interest rate is 2% for US dollars and 1% for euro

The exchange rate is 1.25 dollars to a euro.

To calculate future exchange rate:

1.25dollars (1+exchange rate of us/1+ exchange rate of euro)

= 1.25(1.02/1.01)

= 1.2625

Approximately 1.26

After a year they will be getting .26 million dollars.

They need to invest something close to this amount 1.2/1.02

Therefore option b is the best answer

You might be interested in
A network structure is:
olga_2 [115]
None of the above
Explanation: The network structure is a newer type of organizational structure viewed as less hierarchical (i.e., more "flat"), more decentralized, and more flexible than other structures. In a network structure, managers coordinate and control relationships that are both internal and external to the firm.
8 0
4 years ago
Read 2 more answers
"Liberty may be endangered by the abuse of liberty, but also by the abuse of power."—James Madison Which of the following statem
Alex73 [517]

Answer:

James Madison is known as the Father of the Constitution, and he worked very hard to limit the powers of the government branches, so that no government branch would be more powerful than the other two. He was a great supporter of the Bill of Rights, which also limited the power of the government towards the citizens of the nation.  

This specific quote refers to the checks and balances system that prevents any of the three branches of the US government; executive, legislative and judicial, from becoming too powerful.

5 0
3 years ago
There are five basic steps to personal financial planning and their related tasks. Arrange these steps and examples of related t
svp [43]

Answer:

B. Evaluate your financial health. Record all expenses for a month to compare income and expenses.

D. Define your financial goals. Pay off credit​ card(s) by the end of this school term.

A. Develop a plan of action. Develop a budget matching income and projected expenses for the remainder of this academic year.

E. Implement the plan. Reduce expenses in problem areas so amounts do not exceed budgeted projections.

C. Review progress on the​ plan, reevaluate the​ plan, and revise the plan or start over with a new one. Based on this​ year, develop a revised budget for next year based on projected income and expenses.

Explanation:

The five basic steps of financial planning are evaluate, define, develop, implement, and review, or EDDIR for short. It basically by knowing your current position and defining how you want to be in the future. Then you must develop a plan and try to implement that plan. After some prudent time, you should go back and review if the plan was successful or not.

5 0
4 years ago
The Cutting Department has 6,000 units in process at the end of September that are 100% complete for direct materials. The units
MArishka [77]

Answer:

equivalent units of production = 6,000 units

Explanation:

given data

process at end of September = 6,000 units

direct materials = 100%

direct labor and manufacturing overhead = 70%

solution

we get here equivalent units of production for the conversion cost that is

equivalent units of production = process at end × direct materials complete .........................1

put here value and we get

equivalent units of production = 6,000 units ×  100%

equivalent units of production = 6,000 units

7 0
4 years ago
In her spare time, Sharon is the chair for a local nonprofit organization. The project committee is attempting to determine what
maxonik [38]

Answer: (D) Competing

Explanation:

 According to the given question, Sharon is one of the chair-person of a local non-profit organization and usually in her free time she selected the various types of ideas, thoughts and then forced her ideas on the other organizational members.

So, on the basis of the given concept she is using the competing approach to conflict as this type of approach is typically used for making quick decisions for the purpose of resolving various types of problems or issue is an organization. This is also known as the conflicting management style.  

Therefore, Option (D) is correct answer.

3 0
3 years ago
Other questions:
  • The owner of Showtime Movie Theaters, Inc., would like to predict weekly gross revenue as a function of advertising expenditures
    6·1 answer
  • The purpose of time management is to ________.
    8·2 answers
  • uppose McKnight ​Corp.'s breakeven point is revenues of $ 1 comma 100 comma 000. Fixed costs are $ 660 comma 000. Requirements 1
    10·1 answer
  • Two or more organizations that join forces in order to achieve advantages that neither can perform as well alone are known as __
    12·1 answer
  • An electronic firm invested $60,000 in a precision inspection device. It cost $4000 to operate and maintain in the first year an
    13·1 answer
  • Which statement is true of an e-distributor? a. An e-distributor offers services from different vendors in separate packages. b.
    6·1 answer
  • Which of the following is true of taxes and subsidies? Group of answer choices Politicians like to levy taxes, but they are relu
    14·1 answer
  • Association Rule Analysis is the statistical technique typically used to conduct market basket analysis.
    5·1 answer
  • Do u think that the production employees should recieve the same fringe benefits and share of profits as a factory manager? Just
    8·1 answer
  • 2. Three years ago, Shawheen deposited $5,000 in a savings account. Today, the account is worth
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!