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Question 53

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Amazing Corporation,a U.S.enterprise,sold product to a customer in Wales on October 1,20x1 for £100,000 with payment required on April 1,20x1. Relevant exchange rates are: Use the following to answer questions: Amazing Corporation,a U.S.enterprise,sold product to a customer in Wales on October 1,20x1 for £100,000 with payment required on April 1,20x1. Relevant exchange rates are:   The discount factor corresponding to the company's incremental borrowing rate for 6 months is 0.95. -What term is used to describe the circumstances under which Amazing Corporation is entering the forward contract? A) hedge of an unrecognized foreign currency firm commitment B) hedge of a recognized foreign-currency-denominated asset C) hedge of a forecast foreign-currency-denominated transaction D) hedge of net investment in foreign operations The discount factor corresponding to the company's incremental borrowing rate for 6 months is 0.95.
-What term is used to describe the circumstances under which Amazing Corporation is entering the forward contract?


A) hedge of an unrecognized foreign currency firm commitment
B) hedge of a recognized foreign-currency-denominated asset
C) hedge of a forecast foreign-currency-denominated transaction
D) hedge of net investment in foreign operations

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