3. A foreign exchange trader with a U.S. bank took a short position of 5,000,000 when the...

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3. A foreign exchange trader with a U.S. bank took a short position of £5,000,000 when the

$/£ exchange rate was 1.55. Subsequently, the exchange rate has changed to 1.61. Is this movement in the exchange rate good from the point of view of the position taken by the trader? By how much has the bank’s liability changed because of the change in exchange rate?

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ISE International Financial Management

ISBN: 9781260575316

9th International Edition

Authors: Cheol Eun, Bruce Resnick, Tuugi Chuluun

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