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#9) An investor entered into a short forward contract to sell 100,000 GBP for USD at an exchange rate of 1.4000 USD/GBP. How much does
#9) An investor entered into a short forward contract to sell 100,000 GBP for USD at an exchange rate of 1.4000 USD/GBP. How much does the investor gain or lose if the exchange rate at the end of the contract is 1.4200 USD/GBP?
A. Lost $2,000
B. Broke even (No gain or lose)
C. Gained $1,000
D. Gained $2,000
E. More information is needed
PLEASE SHOW ALL FORMULA & WORK & EXPLANATIONS -----All rates are per annum with continuous compounding unless otherwise stated
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