Please explain why one-month discount rate is used from 12/31/19 to 1/15/19 instead of half-month discount rate? Car Corp. (a U.S.-based company) sold parts to a Korean customer on December 16, 2018, with payment of 10 million Korean won to be received on January 15, 2019. The following exchange rates applied: Date December 16, 2018 December 31, 2018 January 15, 2019 Spot rate Forward rate to Jan.15 $ .00092 $ .00098 .00090 .00093 .00095 .00095 A) $ Assuming a forward contract was entered into on December 16, at what amount should the forward contract be recorded at December 31, 2018? Assume an annual interest rate of 12% and a fair value hedge. The present value for one month at 12% is 9901. 200. B) $ 295. C) $ 495. D) $ 500. E) $ 9,300. Answer: C Feedback: $.00098 - $.00093 = $.00005 .9901 * $10,000,000 = $495 Please explain why one-month discount rate is used from 12/31/19 to 1/15/19 instead of half-month discount rate? Car Corp. (a U.S.-based company) sold parts to a Korean customer on December 16, 2018, with payment of 10 million Korean won to be received on January 15, 2019. The following exchange rates applied: Date December 16, 2018 December 31, 2018 January 15, 2019 Spot rate Forward rate to Jan.15 $ .00092 $ .00098 .00090 .00093 .00095 .00095 A) $ Assuming a forward contract was entered into on December 16, at what amount should the forward contract be recorded at December 31, 2018? Assume an annual interest rate of 12% and a fair value hedge. The present value for one month at 12% is 9901. 200. B) $ 295. C) $ 495. D) $ 500. E) $ 9,300. Answer: C Feedback: $.00098 - $.00093 = $.00005 .9901 * $10,000,000 = $495