Question

46. It is Tuesday, 27 March 201X, and an Australian importing company has to pay a...

46.

It is Tuesday, 27 March 201X, and an Australian importing company has to pay a US exporter USD 75 000 within the next six weeks. The company enters into a forward exchange contract with an FX dealer for ‘one month forward delivery' of USD. On what date will value settlement occur?

A.

29 March 201X

B.

27 April 201X

C.

29 April 201X

D.

30 April 201X

Homework Answers

Answer #1

Ans: 27 April 201X.

Settelment of Forward contracts: A currency forward contract locks the exchange rate for the future currency exchange at a prespecifeid date. The forward contract matures on the exact date determined in the contract. There is no such provisions like T+1 or T+2 settelments. Here in the above case, there is a one month forward contract which is entered on 27th march 201X. Since it is an one mothe forward contract it will mature on the date which due on exact one moth later i.e 27th of April.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Your start up a company has negotiated a contract to provide a database installation for a...
Your start up a company has negotiated a contract to provide a database installation for a manufacturing company in Poland. The firm has agreed to pay you 108,000 in three months time when the installation will occur however it insists on paying in Polish Zioty(PLN). You don't want to lose the deal (the company is your first client) but are worried about the exchange risk, In particular, you are worried the Zioty could depreciate relative to the dollar. You contact...
Case Study You have just been hired as the new treasurer of an Australian firm called...
Case Study You have just been hired as the new treasurer of an Australian firm called Sun Solar Panels (SSP). SSP produces commercial solar panels. It is a well established brand in both the UK and New Zealand. In fact, it distributes (sells) its entire output to UK and New Zealand retailers. These sales are made through SSP's UK and New Zealand subsidiaries which act as distributors of the product. Each wholesale transaction in the UK is settled in GBP...
Read the attached articles about the proposed merger of Xerox and Fujifilm. Utilizing your knowledge of...
Read the attached articles about the proposed merger of Xerox and Fujifilm. Utilizing your knowledge of external and internal analysis, business and corporate strategy, and corporate governance, please discuss the following questions: 1. What is the corporate strategy behind the merger of Xerox and Fujifilm? 2. Why did Xerox agree to the merger? Is this a good deal for Xerox? Discuss the benefits and challenges they face with the merger. 3. Why did Fujifilm agree to the merger? Discuss the...
Delta airlines case study Global strategy. Describe the current global strategy and provide evidence about how...
Delta airlines case study Global strategy. Describe the current global strategy and provide evidence about how the firms resources incompetencies support the given pressures regarding costs and local responsiveness. Describe entry modes have they usually used, and whether they are appropriate for the given strategy. Any key issues in their global strategy? casestudy: Atlanta, June 17, 2014. Sea of Delta employees and their families swarmed between food trucks, amusement park booths, and entertainment venues that were scattered throughout what would...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT