Question
A Canadian firm will have to pay US $1 million six months from now for the goods purchased from a US company. In light of
A Canadian firm will have to pay US $1 million six months from now for the goods purchased from a US company. In light of the COVID-19 pandemic, the company is concerned about potential increases in the value of the US dollar in the future. How could this firm hedge against this risk with forwards? (8 marks)
Forward contract quotations (CAD/USD)
| period | price |
| 1 month | 1.37374 |
| 3 month | 1.37510 |
| 6 month | 1.37765 |
| 9 month | 1.38052 |
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Makers And Takers The Rise Of Finance And The Fall Of American Business
Authors: Rana Foroohar
1st Edition
0553447238, 978-0553447231
