Suppose That on the Maturity Date of the Forward Contract,the

question 16

Multiple Choice

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

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Mental Illness

A condition that affects a person's thinking, feeling, behavior, or mood, significantly impacting daily functioning and interaction with others.

Unconventional

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Illogical

Lacking in sound reasoning or coherent argumentation, often leading to conclusions or actions that defy rational thought.

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Open to more than one interpretation or having a double meaning.