Gray Wolf. Gray Wolf, Ltd., a Canadian manufacturer of raincoats, does not selectively hedge its transaction exposure. Instead, if the date of the transaction is known with certainty, all foreign currency-denominated cash flows must utilize the following mandatory forward cover formula: Mandatory Forward Cover 0-90 days 91-180 days 180 days paying the points forward 75% 60% 50% Recieving the points forward 100% 90% 50% Gray Wolf expects to receive multiple payments in Danish kroner over the next year. DKr3,000,000 is due in 90 days, DKr2,000,000 is due in 180 days, and DKr1,000,000 is due in one year. Using the following spot and forward exchange rates, what would be the amount of forward cover required by company policy for each period?   Dkr = C $1.00 Spot rate 4.70 3-month forward rate 4.71 6-month forward rate 4.72 12-month forward rate 4.74

Caribou River. Caribou River, Ltd., a Canadian manufacturer of raincoats, does not selectively hedge its transaction exposure. Instead, if the date of the transaction is known with certainty, all foreign currency-denominated cash flows must utilize the following mandatory forward cover formula: Caribou expects to receive multiple payments in Danish kroner over the next year. Kr3,000,000 is due in 90 days; Kr2,300,000 is due in 180 days; and Kr950,000 is due in one year. Using the following spot and forward exchange rates, what would be the amount of forward cover required by company policy for each period? What would be the Canadian dollar amount of forward cover required by company policy in 3 months? C$ (Round to the nearest cent.) Data table Data table (Click on the following icon in order to copy its contents into a spreadsheet.) (Click on the following icon in order to copy its contents into a spreadsheet.) Spot rate, Kr/C$ 4.61 Mandatory Forward Cover 0-90 days Paying the points…

Please answer both subparts. 1. The following Information should be used for Questions 1 and 2. The treasurer of X wants to hedge an exposure to currency risk. X is a company whose domestic currency is the euro, and the company must make a payment of US $500 000 to a US supplier in 6 months' time. The following market rates are available: Exchange rates: $ per €1 Spot= 1.604 ± 0.002 6 months forward= 1.570 ± 0.004 6 month interest rates: Euro Borrowing= 4.8%. Euro Deposits= 4.4% US dollar Borrowing= 2.5%. US dollar Deposits= 2.0%. What would be the euro cost to X if he hedges through a forward contract? (a) Euro 326, 495 (b) Euro 319, 285 (c) Euro 313, 525 (d) Euro 333, 295 2. What would be the cost to X if he hedges through the money market? (a) USD 634, 631 (b) USD 631, 634 (c) Euro 316, 634 (d) Euro 316, 436

Apply derecognition criteria of U.S. GAAP to Company B’s situation below: Company B sells a portfolio of 100 short-term receivables to a bank for cash by guaranteeing to buy back first 20 defaulted receivables at the amount due from the debtors.  The historical default rates on such receivables are up to 10%. The customers are notified of the sale and pay directly to the bank. The bank may subsequently sell or pledge these receivables. Under U.S. GAAP, should Company B derecognize this portfolio of short-term receivables?  Why?