Suppose that instead of funding the $100 million investment in 12 percent British loans with CDs issued in the United Kingdom, the FI manager in problem 20 hedges the foreign exchange risk on the British loans by immediately selling its expected one-year pound loan proceeds in the forward FX market. The current forward one-year exchange rate between dollars and pounds is $1.53/£1. a. Calculate the return on the FI’s investment portfolio (including the hedge) and the net return for the FI over the year. b. Will the net return be affected by changes in the dollar for pound spot foreign exchange rate at the end of the year?

The cook corporation has two divisions--east and west. the divisions have the following revenues and expenses: east west sales $ 603,000 $ 506,000 variable costs 231,000 300,000 traceable fixed costs 151,500 192,000 allocated common corporate costs 128,600 156,000 net operating income (loss) $ 91,900 $ (142,000 ) the management of cook is considering the elimination of the west division. if the west division were eliminated, its traceable fixed costs could be avoided. total common corporate costs would be unaffected by this decision. given these data, the elimination of the west division would result in an overall company net operating income (loss)