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Hopkins Corporation has a subsidiary located in Singapore. Next year, the Singapore subsidiary is expected to generate income of S$2,000,000. Hopkins decides to hedge its
Hopkins Corporation has a subsidiary located in Singapore. Next year, the Singapore subsidiary is expected to generate income of S$2,000,000. Hopkins decides to hedge its translation exposure using a forward contract. The 360-day forward rate for the Singapore dollar is $0.56. If the Singapore dollar ________ by $0.03, Hopkins will have realized a ________ of $________.
a. Appreciates; loss; 60,000
b. Depreciates; gain; 60,000
c. Depreciates; loss; 60,000
d. [Depreciates; gain; 60,000] and [Appreciates; loss; 60,000]
e. Appreciates; gain; 60,000
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