Car Corp (A U -Assuming a Forward Contract Was Entered Into, the Foreign Currency

Multiple Choice

Car Corp. (a U.S.-based company) sold parts to a Korean customer on December 16, 2011, with payment of 10 million Korean won to be received on January 15, 2012. The following exchange rates applied: $\begin{array}{lrr}& & \text { Forward } \\ & \text { Sot } & \text { Rate } \\\text { Date } & \text { Rate } & \text { to Jan.15 }\\\text { December 16, 2011 } & \$ .00092 & \$ .00098 \\\text { December 31,2011 } & .00090 & .00093 \\\text { January } 15,2012 & .00095 & .00095\end{array}$
-Assuming a forward contract was entered into, the foreign currency was originally sold in the foreign currency market on December 16, 2011 at a

A) forward contract discount $600.
B) forward contract premium $600.
C) forward contract discount $980.
D) forward discount premium $980.
E) There is no premium or discount because the fair value of the contract is zero.