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On November 15, 2019, Pasay Corporation purchased goods on account Corporation for 2,500 Yen. The billing date for the sale is December 1, 2019, and in 60 days on January 30, 2020. Pasay Corporation enters into a forward contr Yen from Asian Bank in 60 days. The relevant exchange rates were as follows: 1/30/20 P45 P45 Spot rate Forward rate 12/1/19 P37 P39 12/31/19 P40 P41 How much is the FOREX gain or loss on the forward contract on December 31, A. P2,500 gain B. P7.500 loss

On November 15, 2019, Pasay Corporation purchased goods on account Corporation for 2,500 Yen. The billing date for the sale is December 1, 2019, and in 60 days on January 30, 2020. Pasay Corporation enters into a forward contr Yen from Asian Bank in 60 days. The relevant exchange rates were as follows: 1/30/20 P45 P45 Spot rate Forward rate 12/1/19 P37 P39 12/31/19 P40 P41 How much is the FOREX gain or loss on the forward contract on December 31, A. P2,500 gain B. P7.500 loss

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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On November 15, 2019, Pasay Corporation purchased goods on account from Japanese Corporation for 2,500 Yen. The billing date for the sale is December 1, 2019, and payment is due in 60 days on January 30, 2020. Pasay Corporation enters into a forward contract to buy 2,500 Yen from Asian Bank in 60 days. The relevant exchange rates were as follows: 12/1/19 12/31/19 1/30/20 P37 P40 P45 Spot rate Forward rate P39 P41 P45 How much is the FOREX gain or loss on the forward contract on December 31, 2019? A. P2,500 gain B. P7,500 loss C. P5,000 gain D. P2,500 loss
Transcribed Image Text:On November 15, 2019, Pasay Corporation purchased goods on account from Japanese Corporation for 2,500 Yen. The billing date for the sale is December 1, 2019, and payment is due in 60 days on January 30, 2020. Pasay Corporation enters into a forward contract to buy 2,500 Yen from Asian Bank in 60 days. The relevant exchange rates were as follows: 12/1/19 12/31/19 1/30/20 P37 P40 P45 Spot rate Forward rate P39 P41 P45 How much is the FOREX gain or loss on the forward contract on December 31, 2019? A. P2,500 gain B. P7,500 loss C. P5,000 gain D. P2,500 loss
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