Answer:
Profit of $3000
Explanation:
The exchange rate of a future contract is usually fixed at the time when the contract is buy 100,000 euros at a futures contract price of $1.22.
The Value in dollars at the time is: $122,000
At the maturity spot rate of the euro is $1.25.
The value of the contract is: $125,000
The difference:
$125,000-122,000
=$3000.
Since the maturity spot rate is higher, there is a profit of $3000 from speculating with the futures contract.
The answer is A assigning the responsibility of completing a task to another
Answer:
Cash interest paid to the bondholders in 2016 is $9,000
Explanation:
The cash interest paid on the bond can be ascertained using the below coupon amount formula:
cash interest=face value*coupon rate
face value of the bond is $100,000
coupon rate is 9%
cash interest=$100,000*9%=$9,000
The cash account would be credited while interest expense is debited with $9000 plus amortization of premium on bonds