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Celine Co Will Need €500,000 in 90 Days to Pay for for German

Question 1

Multiple Choice

Celine Co. will need €500,000 in 90 days to pay for German imports. Today's 90-day forward rate of the euro is $1.07. The spot rate of the euro in 90 days is forecasted to be $1.02. Based on this information, the expected value of the real cost of hedging payables is $____.


A) -25,000
B) 25,000
C) -107,000
D) 10,700

Correct Answer:

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