Question
Assume the spot exchange rate today is C$1.02 per $US, while the three-month forward rate is C$1.06 per $US. What will be the profit for
Assume the spot exchange rate today is C$1.02 per $US, while the three-month forward rate is C$1.06 per $US. What will be the profit for an investor who takes a 100,000-$US short position in the forward contract if the spot rate in three months equals 1.05?
Question 12 options:
a) 1,000
b) -1,000
c) 4,000
d) -4,000
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International Finance Theory and Policy
Authors: Paul R. Krugman, Maurice Obstfeld, Marc J. Melitz
10th edition
978-0133425895, 133425894, 978-0133423631, 133423638, 978-0133423648
