Question
consider 1-yr forecast with three equally probable scenarios: vehicles sold Price Spot FX S 0 1-yr Forward Spot FX S 1-yr Cost 25,000 $100,000 1.25$/Euro
consider 1-yr forecast with three equally probable scenarios:
| vehicles sold | Price | Spot FX S0 | 1-yr Forward | Spot FX S1-yr | Cost |
| 25,000 | $100,000 | 1.25$/Euro | 1.38$/Euro | 1.25$/E | E 50,000 |
| 5,000 | $100,000 | 1.25$/Euro | 1.38$/Euro | 1.45$/E | E 50,000 |
| 5,0000 | $100,000 | 1.25$/Euro | 1.38$/Euro | 1.10$/E | E 50,000 |
Design a one-year hedge strategy using either Forwards or Options contracts: meaning, choose the contract type, choose the amount you want to hedge. Assume the option premium is $0.1 per euro, and the strike is 1.25$/Euro. Premium is paid today.
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Banking On Freedom Black Women In U.S. Finance Before The New Deal
Authors: Shennette Garrett-Scott
1st Edition
0231183917, 978-0231183918
