On December 1, 2021, Keenan Company, a U

question 19

Multiple Choice

On December 1, 2021, Keenan Company, a U.S. firm, sold merchandise to Velez Company of Canada for 150,000 Canadian dollars (CAD) . Collection of the receivable is due on February 1, 2022. Keenan purchased a foreign currency put option with a strike price of $0.97 (U.S.) on December 1, 2021. This foreign currency option is designated as a cash flow hedge. Relevant exchange rates follow: Compute the fair value of the foreign currency option at February 1, 2022.

• A) $6,000.
• B) $4,500.
• C) $3,000.
• D) $7,500.
• E) $1,500.

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Definitions:

Geographically Distinct

Characterized by features or qualities that differentiate one geographical area from another, often due to natural boundaries, climate, or landscapes.

Anatomically Modern

Refers to Homo sapiens who have physical characteristics similar to those of humans today, emerging about 200,000 years ago.

Anatomically Modern Humans

Homo sapiens characterized by anatomical features similar to those of contemporary humans, emerging approximately 300,000 to 200,000 years ago.

Lumpers

Individuals or scholars who prefer to classify information or objects into broad categories, minimizing differences within those categories.