On September 1,2017,Mudd Plating Company Entered into Two Forward Exchange

question 16

Multiple Choice

On September 1,2017,Mudd Plating Company entered into two forward exchange contracts to purchase 250,000 euros each in 90 days.The relevant exchange rates are as follows: The second forward contract was strictly for speculation.On September 30,2017,what amount of foreign currency transaction gain should Mudd Plating report in income?

• A)$0.
• B)$2,500.
• C)$5,000.
• D)$10,000.

---

Definitions:

Poisson Distribution

A probability distribution that indicates the likelihood of a specific number of occurrences happening within a certain time or space period, given that these occurrences happen at a constant average rate and are independent of the time elapsed since the prior occurrence.

Exponential Distribution

A statistical model that represents the intervals between occurrences in a continuous and independent process happening at a steady average pace.

Exponential Distribution

A statistical distribution used for modeling the time between events in a process where events occur continuously and independently at a constant average rate.

Bank Teller

A financial service professional who assists customers in managing bank accounts, executing transactions such as deposits and withdrawals, and providing information on bank products.