22-118 What Is the Net Gain or Loss on the Loan

question 95

Multiple Choice

22-118 What is the net gain or loss on the loan given that the exchange rates at the time of repayment were $1.63/£ in the cash market and 1.62/£ in the futures market? Assume that the futures position is opened and unwound as stated in questions 114 and 116.

• A)$2,120,000 loss.
• B)$1,330,000 loss.
• C)$2,670,000 loss.
• D)$1,330,000 gain.
• E)$2,670,000 gain.

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Definitions:

Objective Fault

A legal standard that determines liability based on failure to meet an objective level of care, regardless of the defendant's intent or knowledge.

Vicarious Liability

A legal principle holding a party responsible for the actions of another, typically applied when an employer is held liable for the actions of an employee.

Corporate Liability

The legal concept that a corporation can be held responsible for the actions of its employees or agents, subject to laws and regulations governing corporate conduct.

Search Warrant

An official court order authorizing law enforcement agencies to conduct a search of a place and seize evidence.