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The transaction gain or loss to be recognized over the term of a forward exchange contract entered into to speculate in a foreign currency within a fiscal year is measured by the difference between the:

a) spot rate at inception of the contract and forward rate at inception of the contract.

b) spot rate at inception of the contract and spot rate at settlement of the contract.

c) forward rate at inception of the contract and spot rate at settlement of the contract.

d) forward rate at inception of the contract and forward rate at settlement of the contract.

Accounting Basics, Accounting

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