$11$

Problem $9-8($Static$)($LO $9-7)$

A U$.$ exporter has a Thai baht account receivable resulting from an export sale on June $1$ to a customer in Thalland. The exporter signed a forward contract on June $1$ to sell Thai baht hedge of a recognized Thai baht receivable. The spot rate was $$0\mathrm{.}022$ on that date, and the forward rate was $$0\mathrm{.}021.$ Forward points are excluded from the assessment of hedge effect true with respect to the forward points on this contract? The forward points are a:

Multiple Choice

forward contract premium that is recognized in net income as a foreign exchange gain.

forward contract discoumt that is recognised in net income as a foreign exchange gain.

forwand contract premium that is recognised in net income as a foreign exchange loss.

forward contract discount that is recognized in net Kome as a foreign exchange loss.