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1 . In October a U . S . Company is expecting to have to pay 1 , 2 5 0 , 0 0 0
In October a US Company is expecting to have to pay British Pounds to its British suppliers in December, and wants to hedge against a rise in the value of the British Pound relative to the US dollar in December
At this time the spot exchange rate for a British Pound was $ USD. The CME Group futures settle rate for December British Pound FX futures contacts is British Pound $ USD, with each futures contract for British pounds per contract.
a What position and how many contracts should the financial manager take for the hedge? Explain why. hint # contracts Amount of British Pounds Hedging per contract
Type of Position short or long
Explain why
How many contracts should you get?
Number of Contracts
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