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British Mobile placed an order for mobiles from Oman Mobile for which it has to pay in USD. The payment has to be made after 1 year. The price of each mobile is 100 USD As the finance manager of British Mobile you booked a forward contract today. GBP/ USD spot and forward rates are shown below Question: How much does British Mobile have to pay in GBP for each mobile? Question: Why book a forward contract ? Question: Don't you think it is better to book an option contract instead of a forward contract

British Mobile placed an order for mobiles from Oman Mobile for which it has to pay in USD. The payment has to be made after 1 year. The price of each mobile is 100 USD As the finance manager of British Mobile you booked a forward contract today. GBP/ USD spot and forward rates are shown below Question: How much does British Mobile have to pay in GBP for each mobile? Question: Why book a forward contract ? Question: Don't you think it is better to book an option contract instead of a forward contract

Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter11: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 11.18E
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British Mobile placed an order for mobiles from Oman Mobile for which it has to pay in USD. The payment has to be made after 1 year. The price of each mobile is 100 USD As the finance manager of British Mobile you booked a forward contract today. GBP/ USD spot and forward rates are shown below Question: How much does British Mobile have to pay in GBP for each mobile?

Question: Why book a forward contract ?

Question: Don't you think it is better to book an option contract instead of a forward contract

GBPFWD= GBPFWD= GBPFWD= RIC GBP FWD RATES Bid/Ask Loc Srce Deal Time Contributor High Low Date 1:00 02MAY20 GBP= RIC GBPON= GBPTN= GBPSN= GBPSW= GBP2H= GBP3W= GBP1M= GBP2M= GBP3N= GBP4H= GBP5M= GBP6M= GBP7M= GBP8M= GBP9M= GBP10M= GBP11M= GBP1Y= GBP15M= GBP18H= GBP21M= GBP2Y= GBP30M= GBP3Y= GBP4Y= GBP5Y= GBP6Y= GBP7Y= GBP8Y= GBP9Y= GBP10Y= 1.2502/1.2507 SE BANKEN NYC SEBN Bid/Ask Contributor Loc Srce Deal Time High Low Date 03MAY20 0ЗНАY20 1:03 17:58 0.0100 18:00 0.0170 17:58 0.17 18:00 0.63 12:07 0.92 18:00 1.68 18:00 3.54 17:58 4.69 18:00 5.80 18:00 7.04 18:00 7.97 18:00 8.59 18:00 13.00 18:00 13.21 18:00 14.66 18:00 15.20 STG LBBW LBHE 18:00 15.10 COMMERZBANK FFT CBFW CBFT 10:10 15.41 10:02 17.62 FFT CBFW CBFT 10:15 22.44 10:12 23.91 10:00 25.49 COMMERZBANK FFT CBFW CBFT 10:10 30.97 10:00 46.98 NYC BAFX BANY 10:00 73.02 COMMERZBANK FFT CBFN CBFT 10:00 87.00 COMMERZBANK FFT CBFN CBFT 10:00 124.00 COMMERZBANK FFT CBFH CBFT 10:10 167.00 COMMERZBANK FFT CBFN CBFT 10:00 217.00 COMMERZBANK FFT CBFN CBFT 10:00 270.00 STG LBBW LBWF STG LBBW LBHF STG LBBW LBWF STG LBBH LBWF ZUR ZKBZ ZKBZ STG LBBW LBHF STG LBBW LBWF STG LBBW LBWF STG LBBW LBWF STG LBBW LBWF STG LBBW LBWF STG LBBH LBHF STG LBBH LBHF STG LBBW LBHF STG LBBN LBHF STG LBBH LBWF. 0.0400 0.0300 0.20 0.33 1.06 0.62 3.62 4.78 6.01 7.38 8.53 9.54 13.98 8.95 16.07 16.90 16.96 19.98 22.62 28.44 0.40 34.99 0.51 66.98 0.75 159.00 208.00 263.00 325.00 390.00 0.0100/0.0400 0.0100/0.0300 LBBW 0.17/0.31 0.49/0.65 0.22/1.15 1.54/1.74 LBBH LBBW LBBH ZUERCHER KB LBBH LBBW LBBW ОЗНАY20 ОЗМАY20 03MAY20 03MAY20 03MAY20 03MAY20 03MAY20 ОЗНАY20 3.38/3.68 4.39/4.79 5.55/6.05 6.83/7.39 7.77/8.53 8.54/9.54 12.78/13.98 13.21/14.81 14.07/16.07 14.74/16.94 14.56/16.96 12.04/24.04 15.97/23.47 12.97/36.08 13.01/25.01 25.49/34.99 16.00/56,00 46.98/66,98 73.02/98.02 73.00/173.00 116.00/216,00 165.00/265,00 211.00/331.00 260.00/400,00 LBBW LBBW LBBH 03MAY20 03MAY20 ОЗНAY20 03MAY20 03HAY20 03MAY20 03MAY20 LBBH LBBW LBBH LBBW LBBH LBBH 03MAY20 03MAY20 LON LOYL LOYQ LLOYDS BANK COMMERZBANK LLOYDS BANK LON LOYL LOYQ BOA 03MAY20 03MAY20 03MAY20 NYC BAFX BANY 03MAY20 03MAY20 NYC BAFX BANY BOA BOA 03HAY20 03MAY20 03MAY20 03MAY20 03MAY20 03HAY20 03MAY20 个
Transcribed Image Text:GBPFWD= GBPFWD= GBPFWD= RIC GBP FWD RATES Bid/Ask Loc Srce Deal Time Contributor High Low Date 1:00 02MAY20 GBP= RIC GBPON= GBPTN= GBPSN= GBPSW= GBP2H= GBP3W= GBP1M= GBP2M= GBP3N= GBP4H= GBP5M= GBP6M= GBP7M= GBP8M= GBP9M= GBP10M= GBP11M= GBP1Y= GBP15M= GBP18H= GBP21M= GBP2Y= GBP30M= GBP3Y= GBP4Y= GBP5Y= GBP6Y= GBP7Y= GBP8Y= GBP9Y= GBP10Y= 1.2502/1.2507 SE BANKEN NYC SEBN Bid/Ask Contributor Loc Srce Deal Time High Low Date 03MAY20 0ЗНАY20 1:03 17:58 0.0100 18:00 0.0170 17:58 0.17 18:00 0.63 12:07 0.92 18:00 1.68 18:00 3.54 17:58 4.69 18:00 5.80 18:00 7.04 18:00 7.97 18:00 8.59 18:00 13.00 18:00 13.21 18:00 14.66 18:00 15.20 STG LBBW LBHE 18:00 15.10 COMMERZBANK FFT CBFW CBFT 10:10 15.41 10:02 17.62 FFT CBFW CBFT 10:15 22.44 10:12 23.91 10:00 25.49 COMMERZBANK FFT CBFW CBFT 10:10 30.97 10:00 46.98 NYC BAFX BANY 10:00 73.02 COMMERZBANK FFT CBFN CBFT 10:00 87.00 COMMERZBANK FFT CBFN CBFT 10:00 124.00 COMMERZBANK FFT CBFH CBFT 10:10 167.00 COMMERZBANK FFT CBFN CBFT 10:00 217.00 COMMERZBANK FFT CBFN CBFT 10:00 270.00 STG LBBW LBWF STG LBBW LBHF STG LBBW LBWF STG LBBH LBWF ZUR ZKBZ ZKBZ STG LBBW LBHF STG LBBW LBWF STG LBBW LBWF STG LBBW LBWF STG LBBW LBWF STG LBBW LBWF STG LBBH LBHF STG LBBH LBHF STG LBBW LBHF STG LBBN LBHF STG LBBH LBWF. 0.0400 0.0300 0.20 0.33 1.06 0.62 3.62 4.78 6.01 7.38 8.53 9.54 13.98 8.95 16.07 16.90 16.96 19.98 22.62 28.44 0.40 34.99 0.51 66.98 0.75 159.00 208.00 263.00 325.00 390.00 0.0100/0.0400 0.0100/0.0300 LBBW 0.17/0.31 0.49/0.65 0.22/1.15 1.54/1.74 LBBH LBBW LBBH ZUERCHER KB LBBH LBBW LBBW ОЗНАY20 ОЗМАY20 03MAY20 03MAY20 03MAY20 03MAY20 03MAY20 ОЗНАY20 3.38/3.68 4.39/4.79 5.55/6.05 6.83/7.39 7.77/8.53 8.54/9.54 12.78/13.98 13.21/14.81 14.07/16.07 14.74/16.94 14.56/16.96 12.04/24.04 15.97/23.47 12.97/36.08 13.01/25.01 25.49/34.99 16.00/56,00 46.98/66,98 73.02/98.02 73.00/173.00 116.00/216,00 165.00/265,00 211.00/331.00 260.00/400,00 LBBW LBBW LBBH 03MAY20 03MAY20 ОЗНAY20 03MAY20 03HAY20 03MAY20 03MAY20 LBBH LBBW LBBH LBBW LBBH LBBH 03MAY20 03MAY20 LON LOYL LOYQ LLOYDS BANK COMMERZBANK LLOYDS BANK LON LOYL LOYQ BOA 03MAY20 03MAY20 03MAY20 NYC BAFX BANY 03MAY20 03MAY20 NYC BAFX BANY BOA BOA 03HAY20 03MAY20 03MAY20 03MAY20 03MAY20 03HAY20 03MAY20 个
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