_____ A domestic company wishes to hedge an FX receivable arising from an exporting transaction denominated in a foreign currency using an FX forward. Concerning only the hedging transaction, the domestic company will have which of the following accounts if the company (contrary to actual practice) chooses to record the contractual obligations in the general ledger at the inception of the FX forward?

Question

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The domestic company will have a receivable from the FX trader that is a fixed amount in dollars because the FX forward is a contract to exchange currencies at a fixed rate on a future date. The domestic company is selling the foreign currency receivable to the FX trader, so the domestic company will have a receivable from the FX trader for the fixed amount in dollars.

_____ a Domestic Company Wishes to Hedge an FX Receivable