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

question 101

Multiple Choice

Assume IBM enters into a forward contract to purchase 200,000 euros at a rate of $1.90/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) $300,000
• B) $325,000
• C) $380,000
• D) $400,000

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Definitions:

Neurons

are specialized cells in the nervous system that transmit information to other nerve cells, muscle, or gland cells.

Speech

The verbal expression of or the ability to express thoughts and feelings by articulating sounds.

Synaptogenesis

The formation of synapses between neurons in the brain, a critical process in neural development.

Pruning

The process through which the developing brain eliminates unnecessary or redundant synapses.