Question
Consider a trader who takes a long position in a six-month forward contract on the euro. The forward rate is $1.00 = 0.5714; the contract
Consider a trader who takes a long position in a six-month forward contract on the euro. The forward rate is $1.00 = 0.5714; the contract size is 62,500. At the maturity of the contract the spot exchange rate is $1.00 = 0.6061.
- A. The trader has made $6,250.
- B. The trader has made $2,500.
- C. The trader has lost $2,500.
- D. The trader has lost $6,250.
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Fundamentals Of Financial Management Concise
Authors: Eugene F. Brigham, Joel F. Houston
11th Edition
0357517717, 9780357517710
