Scenario 4, do you think the speculative transaction is profitable for the company? A. Selling Speculation Transactions
Fantastic news! We've Found the answer you've been seeking!
Question:
Scenario 4, do you think the speculative transaction is profitable for the company?
Transcribed Image Text:
A. Selling Speculation Transactions with Forward Contracts On November 1, 2015, PT Perkasa purchased a 180-day forward contract from a brokerage company with the aim of speculating to sell US$10,000 at a forward rate of US$1 = Rp13,320. In the following, information regarding the exchange rates associated with these transactions is presented. US$1 Forward Rates for Settlement Date Cash Exchange Date May 1, 2016 1 November 2015 Rp13.100 Rp13.320 December 31, 2015 Rp13.500 Rp13.400 May 1, 2016 Rp13.270 B. Speculation Buy Transactions with Forward Contracts This scenario is the same as the Sell Speculation Transaction scenario with Forward Contracts (Scenario 4.A). However, in this scenario, PT Perkasa buys a 180-day forward contract with the aim of speculating to buy US$10,000. The exchange rate information is the same as the information in Scenario 4.A. A. Selling Speculation Transactions with Forward Contracts On November 1, 2015, PT Perkasa purchased a 180-day forward contract from a brokerage company with the aim of speculating to sell US$10,000 at a forward rate of US$1 = Rp13,320. In the following, information regarding the exchange rates associated with these transactions is presented. US$1 Forward Rates for Settlement Date Cash Exchange Date May 1, 2016 1 November 2015 Rp13.100 Rp13.320 December 31, 2015 Rp13.500 Rp13.400 May 1, 2016 Rp13.270 B. Speculation Buy Transactions with Forward Contracts This scenario is the same as the Sell Speculation Transaction scenario with Forward Contracts (Scenario 4.A). However, in this scenario, PT Perkasa buys a 180-day forward contract with the aim of speculating to buy US$10,000. The exchange rate information is the same as the information in Scenario 4.A.
Expert Answer:
Answer rating: 100% (QA)
Spot oates 1 Rp 13100 6M fooward Rate 1 3D Rp13320 Af... View the full answer
Related Book For
Financial Accounting
ISBN: 978-0078025549
3rd edition
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann
Posted Date:
Students also viewed these accounting questions
-
Do you think the company is doing enough to limit the well-known risks and costs associated with high expatriate failure rates? Is there anything else it might do?
-
Do you think the U.S. Food and Drug Administration should consider adopting the type of cigarette packaging being used in Australia that requires graphic images and removes all branding elements? How...
-
Do you think the Dow Chemical corporate image campaign described in this chapter will be successful? Why or why not? What do you see as key success factors for a corporate image campaign?
-
Write a method to take an integer array as a parameter and return how many elements having the same digits in each element in the array for example if we have array 1 1 , 4 4 , 1 4 , 2 3 , 1 2 , 5 6...
-
Highway crashes continue to claim the lives of thousands of Americans. Grim statistics underscore the need for better laws, stricter enforcement, and safer driving behavior. In 2006, approximately...
-
Review the previous exercise before embarking on this one. Data in previous exercise A simple future elderly model. In this exercise, you will create a very simple version of the FEM designed at...
-
What pressure, \(p_{1}\), is needed to produce a flowrate of 0.09 \(\mathrm{ft}^{3} / \mathrm{s}\) from the tank shown in Fig. P3.92? Figure P3.92 Air P1 T Gasoline 2.0 ft Salt water SG = 1.1 0.06-ft...
-
The management of Finnigan Manufacturing Company is trying to decide whether to continue manufacturing a part or to buy it from an outside supplier. The part, called BIZBE, is a component of the...
-
Camila Company has set the following standard cost per unit for direct materials and direct labor. Direct materials (14 pounds @ $4 per pound) Direct labor (2 hours @ $14 per hour) $ 56 28 During...
-
1. Supply the missing income statement amounts for each of the following companies for the year ended December 31, 2017: 2. Prepare the income statement for Bell Co., which uses the periodic...
-
Redfern Audio produces audio equipment including headphones. At the Campus Facility, it produces two wireless models, Standard and Enhanced, which differ both in the materials and components used and...
-
P r A pipe with a mean radius of r = 600 mm and a wall thickness of t = 18 mm is designed to operate under internal pressure, p. It is made of a steel with a fracture toughness of KIC = 110 MPa m. At...
-
The system is released from rest. The body A has 44 slug and the body B has 93 slug. The spring coristant is k=76 lbf/ft and the tension in the spring when the system is released is 91 lbf....
-
Show by Taylor series expansion, that: (df\ _fj+22f+1+2 fj_f_2 dx 24x What is the order of this approximation?
-
Consider the circuit shown with the following parameters: Vs = 14 V S R = 82002 Determine the voltage at node A relative to the bottom rail, and the current through R entering node A. Vs R Is = 70 mA...
-
Air Conditioning Analysis for the AHU The AHU unit will control the cooling of the comfort area. Assuming the air cooling temperature supplied to the comfort area is in the range of 16 C to 24 C with...
-
What is HTML and what is its role in web development? Question 1 2 1 2 options: A high - level programming language interpreted by a browser. The standard markup language used for creating web pages...
-
Q1) What is the a3 Value Q2) What is the a7 Value Q3) What is the a4 Value Q4) What is the b3 Value Q5) What is the b2 Value Q6) What is the sign of 2nd constraint? A pastry chef at a bakery wants to...
-
The four underlying assumptions of generally accepted accounting principles are economic entity, monetary unit, periodicity, and going concern. Consider the following four independent situations. 1....
-
What are the two primary functions of financial accounting?
-
How is the receivables turnover ratio measured? What does this ratio indicate? Is a higher or lower receivables turnover preferable?
-
Because we cannot see any obvious difference between the ends of a bar magnet, could it be that like poles attract each other and unlike poles repel each other?
-
If you are constructing a parallel-plate capacitor, having air and paper as the dielectric medium between the plates, which dielectric material within the plates will make the capacitor act better?...
-
(a) Is the interaction between a charged object and an electrically neutral object always attractive? Why or why not? (b) In Figure 27.4, which type of magnetic pole is induced at the top of each...
Study smarter with the SolutionInn App