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Forward hedging El Cerdo Feliz is a company that sells Spanish hams to Japan, so they will receive in six months a payment of 1
Forward hedging
El Cerdo Feliz is a company that sells Spanish hams to Japan, so they will receive in six months a payment of million yen. The spot price is The company wants to avoid the uncertainty of being paid with depreciated yens, therefore, the sales manager asks you to eliminate the exchange rate risk. Your bank offers a sixmonth forward contract at
Show the possible results to our sales manager under two scenarios set after those six months, when the rates at that expiration date are and
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