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An investor enters into a long forward contract to buy 1,000,000 GBP for USD at an exchange rate of 1.1050 USD per GBP. How much
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An investor enters into a long forward contract to buy 1,000,000 GBP for USD at an exchange rate of 1.1050 USD per GBP. How much does the investor gain or lose if the exchange rate at the end of the contract is: (a) 1.0970 GBP/USD? (b) 1.1200 GBP/USD? In each case, what is the gain or loss of the investor taking the short position in the contract?
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