Question
An Australian investor holds a one month long forward position on USD. The contract calls for the investor to buy USD 2 million in one
An Australian investor holds a one month long forward position on USD. The contract calls for the investor to buy USD 2 million in one month’s time at a delivery price of $1.4510 per USD. The current forward price for delivery in one month is F= $1.5225 per USD. Suppose the current interest rate interest is 5%. What is the value of the investor’s position?
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Contracted forward rate F C 14510 per USD The current forward price for delivery ...
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Introduction to Corporate Finance What Companies Do
Authors: John Graham, Scott Smart
3rd edition
9781111532611, 1111222282, 1111532613, 978-1111222284
