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timofeeve [1]
3 years ago
9

1. A U.S. company anticipates that it will sell merchandise for €100,000 at the end of August and receive payment for it at the

end of October. On May 1, when the spot rate is $1.20 and the forward rate for delivery on October 31 is $1.21, the company enters a forward contract to sell €100,000 on October 31. The forward contract qualifies as a cash flow hedge of the forecasted sale. The company sells the merchandise on August 30, when the spot rate is $1.232 and the forward rate for October 31 delivery is $1.23 and receives payment of €100,000 and closes the forward contract on October 31, when the spot rate is $1.24. The company has a December 31 year-end. What is the net exchange gain/loss for the year related to this transaction? A. $200 net gain B. $1,800 net loss C. $200 net loss D. $-0-
Business
1 answer:
mamaluj [8]3 years ago
6 0

Answer:

C. $200 net loss

Explanation:

The net loss or gain is calculated on hedging to determine whether the hedge has been beneficial for the company or not. Hedging is a process to transfer exchange rate movement risk. This is usually suitable for the companies who have receipts or payments in foreign currencies.

The hedging gain loss can be calculated as:

Forward rate at the time of contract - spot rate today

$1.21 - 1.232 = 0.0232

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Answer: B. Openness to experience

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4 0
3 years ago
A company exhibits strategic intent when ______.
Tcecarenko [31]

Answer:

The correct answer is A. it relentlessly pursues an ambitious strategic objective, concentrating the full force of its resources and competitive actions on achieving that objective.

Explanation:

A strategic intention is the aspiration of a corporation that aims at its effective development in the long term, for this reason it must be an objective for which all personnel have appropriated. Normally, in order to reach this level, the company must go through a stage of recognition, analysis and projection where the market and growth expectations are taken into account in order to go in the best way for the benefit of both its internal and external users.

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3 years ago
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Isaiah is a Financial Quantitative Analyst for a major stock investment company. What does Isaiah do on a daily basis as a part
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Answer:

He researches, analyzes, and summarizes information about fraud.

4 0
3 years ago
The Learning Institute recently conducted a brainstorming session that generated a large number of ideas for adding new products
olasank [31]

Answer:

The correct answer is C. idea screening .

Explanation:

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7 0
3 years ago
Shakira has a balance of $202. 86 in her checking account on Saturday morning. She uses her debit card to pay her cell phone bil
Nataly [62]

Overdraft is a facility provided by bank to make expenses more than that of the balance present in the account of customers. This facility is provided to certain specified customers with high credibility.

Given

Balance is $202.86

Note: Payments will be recognized in descending order because it is the policy of bank to record the highest transaction first.

Payments made are :

$113.92

$80.73

$35.24

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<h3>Calculations</h3>

\begin{aligned}\rm Overdraft&= Balance - Payments \\\\&#10;\rm Overdraft&= \$202.86-\$113.92-\$80.73-\$35.24-\$16.89\\&#10;\\\rm Overdraft&= \$ -43.92\end

Therefore Shakira will be allowed to overdraw from the account as the amount of overdraft is less than $50.

Elaborating further, When we deduct the payments from the balance in descending order we reach on a conclusion that there will be 2 overdrafts made because after deducting $113.92 and $80.73 from the balance amount of $202.86 there will be 2 payments pending amounting $35.24 and $16.89 from the left balance of $ 8.21.

Therefore the correct option will be OPTION B i.e. 2 overdrafts.

Learn more about overdrafts here:

brainly.com/question/14182019

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