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Business, 27.03.2020 03:51 asteinberg6975

Bromance Inc. is a U. S. corporation that has exposure to Japanese yen and British pounds. It has net inflows of ¥5,000,000 and net outflows of £60,000. The present exchange rate of the Japanese yen is $.012 while the present exchange rate of the British pound is $1.50. Bromance Inc. has not hedged its positions. The yen and pound movements against the dollar are highly and positively correlated. If the dollar strengthens, then Bromance Co. will experience which of the following? a. No changes at all because these factors are not relevant. b. A benefit, because the dollar value of its yen position exceeds the dollar value of its pound position. c. Be adversely affected, because the dollar value of its pound position exceeds the dollar value of its yen position. d. Be adversely affected, because the dollar value of its yen position exceeds the dollar value of its pound position. e. A benefit, because the dollar value of its pound position exceeds the dollar value of its yen position.

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