On November 1, 20x1 Zamfir Company, a U -Assume That on November 1, 20x1 Zamfir Company Enters a Minerals

Multiple Choice

On November 1, 20x1 Zamfir Company, a U.S. corporation, purchased minerals from a Russian company for 2,000,000 rubles, payable in 3 months. The relevant exchange rates between the U.S. and Russian currencies are given: $\begin{array}{lll} & \text { Spot rate } & \text { Forward rate(at February 1,20 x 2) } \\\text { November 1,20 x 1 } 1 & \$ 0.348 & \$ 0.348\\\text {December 31,20 x1 }& \$ 0.359 & \$ 0.352 \\\text { February 1. 20 x 2 } & \$ 0.344 &\end{array}$
-Assume that on November 1, 20x1 Zamfir Company enters a forward contract to buy 2,000,000 rubles on February 1, 20x2.What is the fair value of the forward contract on December 31, 20x1?

A) $8,000
B) $7,800
C) $22,000
D) $8,200