IBM Enters into a Forward Contract to Purchase 200,000 Euros

question 3

Multiple Choice

IBM enters into a forward contract to purchase 200,000 euros at a rate of 1.90 USD/EUR one year from today.If the spot exchange rate is 2 USD/EUR one year later,what is the dollar amount that IBM must pay to receive the euros?

• A)$300,000
• B)$325,000
• C)$380,000
• D)$400,000
• E)$240,000

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Definitions:

Western Providers

Health care professionals or services originating from or based in Western countries, often contrasted with traditional or alternative medicine practitioners from non-Western contexts.

Collectivism

The principle of prioritizing the needs and goals of the group over the individual.

Individual Achievement

Success or accomplishment attained through one's own efforts or abilities, often highlighted in contexts emphasizing personal accountability.

Capitalism

An economic system based on private ownership of the means of production and their operation for profit.