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

question 11

Multiple Choice

Assume IBM enters into a forward contract to purchase 200,000 euros at a rate of $1.50/euro one year from today. If the spot exchange rate is $2/euro one year later, what is the dollar amount that IBM must pay to receive the euros?

• A) $200,000
• B) $225,000
• C) $400,000
• D) $300,000

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Definitions:

Line Managers

Managers who have direct responsibility over a specific department or team within an organization and oversee day-to-day operations.

Recruiting Stages

The sequential steps or phases in the process of identifying, attracting, interviewing, selecting, and hiring candidates for employment.

Directly Involved

Being actively engaged or having a direct role in a particular process, activity, or event, often implying a significant level of participation or responsibility.

Recruitment Objective

A specific goal or target that an organization aims to achieve through its hiring processes, usually to fill vacancies with qualified individuals.