Atwhat amount (in Canadian Dollars) would the forward contract with the bank be recorded, if recorded gross?
A) $337,500.
B) $343,500.
C) $347,500.
D)$349,500.

Question

Quizplus · Accepted Answer

If recorded gross, the forward contract would be recorded at the present value of the CAD 350,000 to be received in 90 days. Using the given forward rate of 0.9650 CAD/USD, the present value would be:

CAD 350,000 / (1 + 0.04 × 90/365) × 0.9650 = CAD 337,500

Therefore, the correct answer is A) $337,500.

Atwhat Amount (In Canadian Dollars) Would the Forward Contract with the Bank