Suppose that on the maturity date of the forward contract,the spot rate turns out to be $1.40/£ (i.e.less than the forward rate of $1.46/£) .Which of the following is true?
A) Boeing would have received $14.0 million, rather than $14.6 million, had it not entered into the forward contract
B) Boeing gained $0.6 million from forward hedging
C) a and b
D) none of these
Correct Answer:
Verified
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