On December 1, 2001 Pimlico Made Sales to a Customer

question 32

Multiple Choice

On December 1, 2001 Pimlico made sales to a customer in India and recorded Accounts Receivable of 10,000,000 rupees. The customer has until March 1, 2002 to pay. On December 1, 2001, Pimlico paid $500 for a put option to sell rupees at a strike price of $2.30 per 100 rupees on March 1, 2002, which was the spot rate on December 1, 2001. On December 31, 2001, the spot rate was $2.80 per 100 rupees and the option premium was $0.004 per 100 rupees. What is the fair value of the option on December 31, 2001?

• A) $0
• B) $500
• C) $400
• D) $10,000

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Definitions:

Frequent Moves

The repeated process of changing one's living location, which can impact various aspects of personal and family life including social relationships and schooling.

Qualitative Research

Research that focuses on nonnumerical data, such as subjective experiences, feelings, or beliefs.

Detailed Descriptions

Thorough and comprehensive accounts or depictions of events, objects, or processes.

Beliefs

Convictions or acceptances that something exists or is true, especially without proof, shaping one's perception and behavior.