Use the Following Information to Answer the Question(s) Below

question 40

Multiple Choice

Use the following information to answer the question(s) below.

On November 2, 2014, Bellamy Corporation sells product to their Danish customer. At the same time, Bellamy signed a forward contract to sell 200,000 Danish krone in ninety days to hedge the account receivable at $0.1905, the 90-day forward rate. The receivable is expected to be collected in ninety days. Assume the forward contract will be settled net and this is a fair value hedge. The related exchange rates are shown below:

-Assuming a present value factor of 1 for simplicity,what is the fair value of this forward contract on December 31?

• A)$160 asset
• B)$160 liability
• C)$140 asset
• D)$140 liability

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Definitions:

Implicit Memory

A type of long-term memory that does not require conscious thought to recall information, such as procedural memory for tasks.

Nondeclarative Memory

A type of long-term memory that doesn't require conscious thought and includes procedural memory, such as how to do things like riding a bike.

Tie Shoes

The skill of fastening shoelaces, which involves fine motor coordination and is commonly taught to young children as part of developing independence.

Implicit Memories

Memories that influence our behaviors and thoughts without our conscious awareness, such as skills and conditioned responses.