Chapter 9 - Foreign Currency Transactions and Hedging ...
Once it receives the 100,000 FC from its customer, the US Corporation can (1) convert the 100,000 FC into US dollars at the existing exchange rate or (2) exercise its option and sell the 100,000 FC at the option rate of .13. The action of the US Corporation will depend upon . Assume that the foreign exchange rate on October 15, 2007 is .12. ................
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