Multiple Choice
On November 14,2014,Scuby Company (a U.S.corporation) enters into a transaction which is denominated in the Canadian dollar.Assume the exchange rate at November 14 is $1.03,and at the December 31 year-end reporting date,the exchange rate is $1.07.On January 27,2015,when the transaction is settled,the exchange rate is $1.05.At the date of settlement,which of the following is correct?
A) The historical rate = $1.05,and the spot rate at which it is settled is the same as the current rate at $1.07.
B) The historical rate = $1.03,and the spot rate at which it is settled is the same as the current rate at $1.06.
C) The historical rate = $1.05,the current rate for reporting at December 31,2014 is $1.07,and the spot rate at which it is settled is $1.03.
D) The historical rate = $1.03,the current rate for reporting at December 31,2014 is $1.07,and the spot rate at which it is settled is $1.05.
Correct Answer:
Verified
Correct Answer:
Verified
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