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AnAmerican company is set to receive 50 millionPeruvian soles from its overseas operations in 12 months.The company decides to enter into a12 month forward contract
AnAmerican company is set to receive 50 millionPeruvian soles from its overseas operations in 12 months.The company decides to enter into a12 month forward contract for 50 million soles to mitigate its price risk.The forward rate is$.30/sole.Find the American firm's profit/loss (in terms of dollars) on the forward contract if the spot rate is $.40/soleat expiration.Round intermediate steps to four decimals.
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