On February 1,Rapido Corporation Entered into a Firm Commitment to Purchase

question 63

Multiple Choice

On February 1,Rapido Corporation entered into a firm commitment to purchase specialized equipment from the Yamasake Trading Company for ¥65,000,000 on April 1.Rapido would like to reduce the exchange rate risk that could increase the cost of the equipment in U.S.dollars by April 1,but Rapido is not sure which direction the exchange rate may move.What type of contract would protect Rapido from an unfavorable movement in the exchange rate while allowing them to benefit from a favorable movement in the exchange rate?

• A) Interest rate swap
• B) Forward contract
• C) Call option
• D) Put option

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Definitions:

Positive Message

Communication that conveys good news, affirmative information, or a positive outcome.

Routine Requests

Standard inquiries or appeals that are made regularly within the context of business or professional communication.

Potential Sale

An opportunity that might result in the purchase of goods or services.

Goodwill Message

A communication intended to foster positive relations, often expressing thanks, congratulations, or well-wishes.