1.	The exchange rate quoted for future delivery of foreign currency is the definition of a(n):
	A)	direct exchange rate.
	B)	indirect exchange rate.
	C)	spot rate.
	D)	forward exchange rate.

2.	A transaction loss would result from:
	A)	an increase in the exchange rate applicable to an asset denominated in a foreign currency.
	B)	a decrease in the exchange rate applicable to a liability denominated in a foreign currency.
	C)	the import of merchandise when the transaction is denominated in a foreign currency.
	D)	a decrease in the exchange rate applicable to an asset denominated in a foreign currency.

3.

On November 1, 2017, American Company sold inventory to a foreign customer. The account will be settled on March 1 with the receipt of $450,000 foreign currency units (FCU). On November 1, American also entered into a forward contract to hedge the exposed asset. The forward rate is $0.70 per unit of foreign currency. American has a December 31 fiscal year-end. Spot rates on relevant dates were:

Date	Per Unit of Foreign Currency
November 1	$0.73
December 31	0.71
March 1	0.74

What will be the adjusted balance in the Accounts Receivable account on December 31, and how much gain or loss was recorded as a result of the adjustment?

A)

Receivable Balance, $319,500; Gain/Loss Recorded, $9,000 gain

B)

Receivable Balance, $319,500; Gain/Loss Recorded, $9,000 loss

C)

Receivable Balance, $333,000; Gain/Loss Recorded, $4,500 gain

D)

Receivable Balance, $333,000; Gain/Loss Recorded, $18,000 gain