Answer:
I would say B would be the best answer.
Explanation:
You shouldn't try to push it onto yourself to fix, the owner/manager to fix the problem!
Answer:
e). None of the above, because a perfect hedge does not exist
A perfect hedge is nearly impossible
Explanation:
A perfect hedge is a position undertaken by an investor that would eliminate the risk of an existing position, or a position that eliminates all market risk from a portfolio. In order to be a perfect hedge, a position would need to have a 100% inverse correlation to the initial position.
At the time of taking an opposite position in Derivatives Market, Perfect Hedge would mean covering the risk involved in the Cash Market Position completely, i.e. 100%. 2. Imperfect Hedge: When the position in the cash market is not completely hedged or not hedged to 100%, then such a hedge is called Imperfect Hedge.
Answer:
The most sensible position is to understand that theory, while not practical in itself, can be immensely helpful when dealing with pratical matters.
This is because theory gives you a sound conceptual foundation that can be used to analyze the practical context, and approach it with the best possible practical solutions.
Without theory, managers have to rely too much on intuition, which can often fail.
Answer:
The answer is 0.01082
Explanation:
The formula for forward exchange rate is:
F = S x 1+rd/1+rf
where F is the forward exchange rate
S is the spot exchange rate(0.010798)
rd is the foreign currency interest rate(3% or 0.03)
rf is the domestic interest rate(3.75% or 0.0375
Month is 3 months(90days) and total number of days in a year is 360days.
Find find the attached file for calculation