A Company Enters into a Futures Contract with the Intent

question 4

Multiple Choice

A company enters into a futures contract with the intent of hedging an expected purchase of some equipment from a German company for DM350,000 on December 31.The contract requires that if the U.S.dollar value of DM700,000 is greater than $350,000 on December 31,the company will receive the difference.Alternatively,if the U.S.dollar value is less than $350,000,the company will pay the difference.Which of the following statements is correct regarding this contract?

• A) The Deutsche mark futures contract effectively hedges against the effect of exchange rate changes on the U.S.dollar value of the Deutsche mark commitment.
• B) The futures contract exceeds the amount of the commitment and thus hedges movements in the Deutsche mark exchange rate.
• C) The futures contract is a contract to sell Deutsche marks at a fixed price.
• D) The extra DM350,000 would be accounted for as a speculative investment.

Understand the core features and diagnostic criteria of Schizophrenia and related disorders as outlined in the DSM-5.

Knowledge of the importance and characteristics of Schneiderian 1st rank symptoms in Schizophrenia.

Recognize the components and effectiveness of the Assertive Community Treatment model in managing Schizophrenia.

Understand the diagnostic criteria for Schizoaffective Disorder according to DSM-5.

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Definitions:

Enforceable

Refers to a legal agreement that can be upheld or compelled in a court of law.

UCC's Statute

A legal guideline adopted to harmonize the law of sales and other commercial transactions across the United States.

Price Term

A condition in a contract specifying the amount to be paid for the goods or services.

Collateral Promise

A secondary promise that is ancillary (subsidiary) to a principal transaction or primary contractual relationship, such as a promise made by one person to pay the debts of another if the latter fails to perform. A collateral promise normally must be in writing to be enforceable.