Question
Assume that rEUR= 8%, rUSD= 3%and X0USD/EUR= 1.28. You want a long forward position in EUR 210,000 1-Year forward. Your banker quotes you the following
Assume that rEUR= 8%, rUSD= 3%and X0USD/EUR= 1.28. You want along forwardposition in EUR 210,000 1-Year forward. Your banker quotes you the following USD/EUR forward rate: F1USD/EUR= 1.25. Which choice is more favorable, the actual forward contract or set up a synthetic forward position?
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Principles of Managerial Finance
Authors: Chad J. Zutter, Scott B. Smart
15th edition
013447631X, 134476315, 9780134478197 , 978-0134476315
