ABC Corporation, Located in Canada, Has an Accounts Receivable of SF

question 27

Multiple Choice

ABC Corporation, located in Canada, has an accounts receivable of SF 1 million to be received in one year. The current spot rate is $0.80/SF and the six-month forward rate is $0.82/SF. The one year interest rates are 4.5 percent and 2 percent in Canada and Switzerland respectively. A one-year call option on Swiss franc at the strike price of $0.81 per Swiss franc for a premium of 0.2 cent per Swiss franc is available.
-The future dollar amount of this receivable using the forward hedge is:

• A) $800,000
• B) $820,000
• C) $836,400
• D) $856,900

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Definitions:

Sexual Jokes

Humorous expressions or stories that involve sexual content, often used to break the ice or entertain, but can sometimes be inappropriate or offensive.

Tension Reduction

The process of relieving stress or strain, often through relaxation techniques or activities.

Humor Content

Humor content refers to the subject matter, theme, or essence of what makes something humorous or comedic.

Defensive Style

The habitual way in which an individual copes with stress and defends against perceived threats to the ego.