On December 1, 2021, Keenan Company, a U

question 40

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:

Mathematical Computation

The process of performing mathematical operations to solve problems or derive new information.

Discrimination

Unjust treatment or consideration of different categories of people, especially based on race, age, or sex.

Facial Recognition

The cognitive ability to identify and distinguish between individual faces, typically using visual cues and patterns.

Right-Brained

Refers to a theory in which the right hemisphere of the brain is more responsible for creative, intuitive, and holistic thought processes.