Jensen Co. expects to pay €50,000 in one month for its imports from France. It also expects to receive €200,000 for its exports to Belgium in one month. Jensen estimates the standard deviation of monthly percentage changes of the euro to be 2.5 percent over the last 50 months. Assume that these percentage changes are normally distributed. Using the value-at-risk (VaR) method based on a 97.5 percent confidence level, what is the maximum one month loss in dollars if the expected percentage change of the euro during next month is 2 percent? Assume that the current spot rate of the euro (before considering the maximum one-month loss) is $1.35.
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Jensen Co. expects to pay €50,000 in one month for its imports from France. It also expects to receive €200,000 for its exports to Belgium ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Critical analysis Q8 When actual output exceeds an economy's full-employment output, how will the self-correcting mechanism direct the economy to long-run equilibrium? Prices will increase causing production costs, which will reduce aggregate supply.
Answers (1)
Broker Bob has a buyer who has seen a property twice and seems ready to make an offer. However, he is objecting because the roof is 12 years old. What should Bob do?
Answers (2)
Sheet piles are used A) as shallow foundations in buildings. B) as deep foundations in buildings. C) as formwork for concrete walls. D) as excavation supports.
Answers (1)
Which of the following liabilities would most likely be listed last on a statement of financial position? Select one:a. Bonds payable, due in 20 years. b. Accounts payable. c. Note payable, due in 3 years. d. Income taxes payable.
Answers (1)
Which of the following are microeconomic issues? Which are macroeconomic issues? a) How will an increase in the price of Coca-Cola affect the quantity of Pepsi-Cola sold? b) What will cause the nation's inflation rate to fall?
Answers (1)
New Questions in Business
What is the acid-test ratio for a merchant with the following account balances? (Round your answer to two decimal places.
Answers (2)
When the market fails to adjust for the full costs of a firm's behavior, this is called?
Answers (1)
What is the basic formula of the malthus theorem?
Answers (1)
If an industry is perfectly competitive or monopolistically competitive, then the government has relatively little reason for concern about the extent of competition new ways of pleasing customers taking advantage of economies of scale regulatory
Answers (1)
Mango Company applies overhead based on direct labor costs. For the current year, Mango Company estimated total overhead costs to be $480,000, and direct labor costs to be $240,000.
Answers (1)