Answered step by step
Verified Expert Solution
Question
1 Approved Answer
19 On December 1, 2021, Keenan Company, a U.S. firm, sold merchandise to Velez Company of Canada for 150,000 Canadian dollar (CAD). Collection of the
19 On December 1, 2021, Keenan Company, a U.S. firm, sold merchandise to Velez Company of Canada for 150,000 Canadian dollar (CAD). Collection of the receivable is due on February 1, 2022. Keenan purchased a foreign currency put option with a strike price of $0.97 (U.S.) on December 1, 2021. This foreign currency option is designated as a cash flow hedge. Relevant exchange rates follow: Spot Rate Option Premium $ 0.97 $ 0.05 Date December 1, 2021 December 31, 2021 February 1 2022 $ 0.95 $ 0.04 $ 0.94 $ 0.03 Compute the U.S. dollars received on February 1, 2022 Multiple Choice $136.500 $142.500 $141.000 Compute the US dollars received on February 1 2022 Multiple Choice $136,500 5142,500 $141.000 $145,500 $138.000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started