DEC is asked to quote a price in Belgian francs for computer sales to a Belgian company. The computers will be paid for in four equal, quarterly installments, beginning 90 days from now. DEC requires a minimum price of $2.5 million to accept this contract. Suppose the spot and forward rates for the Belgian franc are as follows: What is the minimum Belgian franc price that DEC should quote for this order?
A) BF 82,781,457
B) BF 87,108,014
C) BF 81,433,225
D) BF 84,745,763

Question

DEC is asked to quote a price in Belgian francs for computer sales to a Belgian company. The computers will be paid for in four equal, quarterly installments, beginning 90 days from now. DEC requires a minimum price of $2.5 million to accept this contract. Suppose the spot and forward rates for the Belgian franc are as follows:  What is the minimum Belgian franc price that DEC should quote for this order?
A) BF 82,781,457 
B) BF 87,108,014 
C) BF 81,433,225 
D) BF 84,745,763

Quizplus · Accepted Answer

The Answer of DEC is asked to quote a price in Belgian francs for computer sales to a Belgian company. The computers will be paid for in four equal, quarterly installments, beginning 90 days from now. DEC requires a minimum price of $2.5 million to accept this contract. Suppose the spot and forward rates for the Belgian franc are as follows:  What is the minimum Belgian franc price that DEC should quote for this order?
A) BF 82,781,457 
B) BF 87,108,014 
C) BF 81,433,225 
D) BF 84,745,763

DEC Is Asked to Quote a Price in Belgian Francs