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Based on this information below do we Buy or Sell Euro Forward? Which Option to buy? Payment Amount:400,000.00 Spot rate: $1.220/ Forward Information: 6-month forward

Based on this information below do we Buy or Sell Euro Forward?

Which Option to buy?

Payment Amount:400,000.00

Spot rate: $1.220/

Forward Information: 6-month forward rate is $1.240/

Option Information:

  • Strike Price: $1.23/
  • Premium: 1% of the current spot rate (for one foreign currency)

Money market information

US

Greece

Borrowing rate, APR, compounded semiannually

4.0%

5.0%

Investing (lending) rate, APR, compounded semiannually

3.0%

4.5%

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