Ajapanese importer has a €1,000,000 payable due in one year. spot exchange rates 1-year forward rates contract size $ 1.20 = € 1.00 $ 1.25 = € 1.00 € 62,500 $ 1.00 = ¥ 100 $ 1.00 = ¥ 120 ¥ 12,500,000 the one-year risk free rates are i$ = 4.03%; i€ = 6.05%; and i¥ = 1%. detail a strategy using forward contracts that will hedge his exchange rate risk. have an estimate of how many contracts of what type.

a) go short in 16 yen forward contracts. go long in 12 euro contracts.
b) go long in 12 yen forward contracts. go short in 16 euro contracts.
c) go short in 12 yen forward contracts. go long in 16 euro contracts.
d) none of the option

At a small store, a customer enters the front door on average every 8 minutes. a prior study indicated that the time between customers entering the front door during weekdays follows an exponential distribution. what is the probability that the time between customers entering the store on a weekday will be less than or equal to 7? select one: a. 62 b. 43 c. 1/8 d. 7/8 e. 58

Ardmore farm and seed has an inventory dilemma. they have been selling a brand of very popular insect spray for the past year. they have never really analyzed the costs incurred from ordering and holding the inventory and currently fave a large stock of the insecticide in the warehouse. they estimate that it costs $25 to place an order, and it costs $0.25 per gallon to hold the spray. the annual requirements total 80,000 gallons for a 365 day year. a. assuming that 10,000 gallons are ordered each time an order is placed, estimate the annual inventory costs. b. calculate the eoq. c. given the eoq calculated in part b., how many orders should be placed and what is the average inventory balance? d. if it takes seven days to receive an order from suppliers, at what inventory level should ardmore place another order?

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