If an Australian company enters a forward exchange contract to buy US$15 000, then which of the following applies?
A) The company's contractual obligation (at the forward rate) and contractual right (at the spot rate) are settled on a net basis.
B) The company has a contractual obligation to deliver foreign currency at the settlement date and that obligation is realised at the spot rate.
C) The company has a contractual right to receive US$15 000 at the settlement date and that right is an asset fixed in A$ at the forward rate.
D) The company's forward contract will act as a hedge against a recognised asset.

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The Answer of If an Australian company enters a forward exchange contract to buy US$15 000, then which of the following applies?
A) The company's contractual obligation (at the forward rate) and contractual right (at the spot rate) are settled on a net basis.
B) The company has a contractual obligation to deliver foreign currency at the settlement date and that obligation is realised at the spot rate.
C) The company has a contractual right to receive US$15 000 at the settlement date and that right is an asset fixed in A$ at the forward rate.
D) The company's forward contract will act as a hedge against a recognised asset.

If an Australian Company Enters a Forward Exchange Contract to Buy