Answer:
alitalia should do the forward hedge to hedge its transaction exposure
Explanation:
Alitalia can construct the money market hedge as follows
1. borrow Euro whose present value is equal to the amount to be paid.
2. convert it to foreign currency at the current spot rate.
3. place it in a deposit
4. make the payment when the deposit reaches maturity
PV of payment = 10000000/1.05
= 9523809.525
converting in to Euro at the spot rate we get 6802721.09 Euros
so Alitalia has to borrow the above amount and convert it and invest it at 5%.
now the payable amount from the loan is 6802721.09(1+0.03) = 7006802.72 Euros
Hence Alitalia has effective managed to locl in a forward rate of 1.427$/euros (10000000/7006802.72)$/euros
Therefore, alitalia should do the forward hedge to hedge its transaction exposure
The answer is false, it is because in questionnaires like this, open ended questions are considered valuable, which is true in the statement above but what makes it false, is because of the unambiguous response. An open ended questions should not have unambiguous response for they should be more open and would be engaging and more open not only to the person asking but to the audience as well.
Answer:
Equilibrium price to be indeterminate from the information given, but equilibrium quantity to rise.
Explanation:
The recent rains resulted in an increase in demand for kayaks so the equillibrum quantity demanded will rise. Supply will also rise to meet the increased demand.
However we are unable to determine if the price will rise or fall with the given information.
Plastic is cheaper now so kayaks will also be cheaper. On the other hand increase in demand naturally causes an increase in price. So the cheaper price of kayaks will need to be compared with price increases as a result of increased demand to determine if equillibrum price will rise or fall.
<span>production coefficients.
factors of production.
production technologies.
production aggregates.</span>
I think it’s the second one letter B