Question
A Canadian exporter exporting goods to USA will receive USD 100,000 after 3 months. A bank quotes 3 month USD CAD forward bid-ask rate as
A Canadian exporter exporting goods to USA will receive USD 100,000 after 3 months. A bank quotes 3 month USD CAD forward bid-ask rate as (1.2302-1.2315). Based on this information answer the following questions:
- If Canadian exporter enters the forward contract. If the spot rate after 3 months is 1.12 then what will be his notional profit/loss?
- How much the Canadian exporter will receive if he enters the forward contract?
- What is bid-ask spread?
- If Canadian exporter enters the forward contract. If the spot rate after 3 months is 1.52 then what will be his notional profit/loss?
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Accounting for Governmental and Nonprofit Entities
Authors: Earl R. Wilson, Jacqueline L Reck, Susan C Kattelus
15th Edition
978-0256168723, 77388720, 256168725, 9780077388720, 978-007337960
