13.) IMXP Corp. enters into a 30-day forward exchange contract to buy 113,540,00

Question

13.) IMXP Corp. enters into a 30-day forward exchange contract to buy 113,540,000 yen for $100,000. Which of the following statements is true concerning this transaction?

Select one:

a. The spot exchange rate in 30 days will be 113.54 yen per dollar.

b. IMXP will receive 113,540,000 yen today and pay $100,000 30 days from now.

c. IMXP will pay $100,000 and receive 113,540,000 yen 30 days from now.

d. IMXP will pay $100,000 today and receive 113,540,000 yen 30 days from now.

14.) In addition to those risks faced by domestic corporations, multinational corporations face

Select one:

a. exchange risk and political risk.

b. All domestic and multinational corporations face similar risk profiles.

c. political risk.

d. exchange risk.

Explanation / Answer

13)

Option-C is correct.

A forward exchange contracts is an agreement to exchange different currencies at forward rate.

Therefore, "IMXP will pay $100,000 and receive 113,540,000 yen 30 dyas from now" is correct.

14)

Option-A is correct.

MNS's face both exchange risk and political risk.

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.