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_____ on 11/10/06, Buymax Entered into a 60-Day FX Forward

Question 3

Multiple Choice

_____ On 11/10/06, Buymax entered into a 60-day FX forward involving 100,000 British pounds to hedge a firm purchase commitment. Buymax took delivery on 1/9/07. Direct exchange rates on the respective dates are as follows:
_____ On 11/10/06, Buymax entered into a 60-day FX forward involving 100,000 British pounds to hedge a firm purchase commitment. Buymax took delivery on 1/9/07. Direct exchange rates on the respective dates are as follows: What is the FX gain or loss to be reported in earnings for 2006 on the FX forward? A) $ -0- B) $3,000 gain. C) $3,000 loss. D) $5,000 gain. E) $5,000 loss. What is the FX gain or loss to be reported in earnings for 2006 on the FX forward?


A) $ -0-
B) $3,000 gain.
C) $3,000 loss.
D) $5,000 gain.
E) $5,000 loss.

Correct Answer:

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