In the preceding question, we assumed that there was a usd futures contract in Germany, with a
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In the preceding question, we assumed that there was a usd futures contract in Germany, with a fixed number of usd (100,000 units) and a variable eur/usd price. What if there is no German futures exchange? Then you would have to go to a US exchange, where the number of eur per contract is fixed (at, say, 125,000), rather than the number of usd. How many usd/eur contracts will you buy?
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If hedging is done on a US futures exchange you ...View the full answer
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Related Book For 
International Finance Putting Theory Into Practice
ISBN: 978-0691136677
1st edition
Authors: Piet Sercu
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