The correct answer is 693.33333333.
Answer:
The answer is C.
Explanation:
The US firm is using derivatives to hedge against the risk of Swiss francs falling.
A futures contract is the type of contract that two parties (one the buyer and the other the seller) the buyer will purchase an underlying asset(Swiss francs) from the seller at a later date in the future and at a price agreed by both parties. Futures is a standardized derivatives and it is traded in exchange.
To sell a futures contract or forward contract means the seller is anticipating fall or drop in value or price of the underlying asset (Swiss francs) and we say the seller is holding a short position.
While to buy a futures contract or forward contract means the buyer is anticipating an increase or rise in value or price of the underlying asset (Swiss francs) and we say the seller is holding a long position.
So since the US firm is anticipating a fall in value of Swiss francs, he will sell a futures contract on the Swiss francs
The diamond symbol indicates in a regulatory buoy is that it
shows warning for the buoy as they try to point out the presence of a wreck,
shoal, rock or dam that will contribute of having the buoy to be involved into
a danger.
Answer:
The correct answer is letter "C": Increase borrowing in the US, convert to Canadian dollars and invest in Canada.
Explanation:
Carry trade is a trading strategy that consists in requesting loans to a low-interest rate and use that financing to invest in assets that would revenue higher income. This strategy is being used in the currency market. <em>The idea is for investors to be financed in one currency with a low-interest rate so later that money can be invested in other currencies with a higher interest rate in the original country where the currency is issued</em>.
Answer:
$27,600
Explanation:
The maximum amount that the university should pay must be equal to the variable costs of the personnel department. The department's total costs are $35,500 and the variable costs are $22,000 and the avoidable fixed costs are $5,600, so as long as the university pays up to $27,600 (= $22,000 + $5,600) to the outside vendor, then it will not have increased its total costs.
The fixed non-avoidable costs = $35,500 - $22,000 - $5,600 = $7,900 will remain regardless of what decision is made. If the university pays more than the variable costs and avoidable fixed costs, e.g. $28,000, then total costs would be $36,900 which results in a $400 increase.