Use the Following Information for Questions 18-19

question 96

Short Answer

Use the following information for questions 18-19.
On August 25, 2020, Beta Inc. entered into a forward contract to buy 25,000 Krubles (KRB) for $ 3,800 Canadian (CAD) on September 5, 2020. On August 31, 2020, 25,000 KRB can be purchased for $ 3,500 CAD. On September 5, Beta settles the contract but does NOT take delivery of the KRB.
-On September 5, 2020, the KRB is trading at $ 0.15 CAD. The entry to record the settlement of the contract is

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Definitions:

Linear

A relationship or function that can be graphically represented in two dimensions by a straight line.

Consumer Utility

A measure of satisfaction or happiness that consumers derive from consuming goods and services.

Budget Line

A graphical representation of all possible combinations of two goods that an individual can afford with their limited budget at set prices.

Indifference Curves

Graphical representations showing combinations of two goods that provide an individual with the same level of satisfaction, indicating preferences without implying superiority.