3. Trading in foreign exthange What are spot rates and forward rates? Suppose you open the newspaper today and obverve the following indirect exchange rate quotations for the British pound: The Bentish pound is selling at a in the forwad makket. Subgose you make a 1500,000 sale to a Bensh custorner who has 60 davs to pay you in cash. The cuntomer wilt pay you in thitsh pounds, bid your company is based in the United States, so you ame most concemed wath the dollar value of the pyment. If the cuntomver pays you f500,000 today, how mach is that worthin dollars? 51,016,329 5740,603 1925,754 The Britich pound is seliling at a in the forward market. Suppose you make a r500,000 sale to a Britioh customer who has 60 days to pay you in cash. The customer will pay you in British pounds, but your company in based in the United states, so you are most concemed with the dollar value of the payment. If the customer pays you isoo, 000 today, hew much is that wouth in dollars? 51,018,329 5740,603 5925,754 \$6.10,028 Assume that the forward market is norrect and the 60-day forward exchange rate quoted in the newspaper today (abeve) is the spot exchange rate t0 days brom now. If the cantomen waits the full 60 darn and parn you r\$00,000, how much have you lost (in dolar terms) due to wxchange rate Aichuations? 53,497 57,537 16,467 44,850