Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. 4. face co. uses the us dollar as its functional c

4. Face Co. uses the US dollar as its functional currency in Country X. At...

80.2K

Verified Solution

Question

Accounting

image
4. Face Co. uses the US dollar as its functional currency in Country X. At December 31, 2015 Face's subsidiary has a net asset position in Country X of euro 100,000. Which correctly describes the action that Face will take on December 31, 2015 to hedge its euro exposure ? a. Face will enter into a spot contract to purchase euros and sell US dollars b. Face will enter into a spot contract to purchase US dollars and sell euros c. Face will enter into a forward contract to purchase euros and sell US dollars d. Face will enter into a forward contract to purchase US dollars and sell euros e. Face will purchase an FX option contract giving it the right but not the obligation to purchase euros and sell US dollars

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students