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Q2: Your name is Jane and you are the finance director of a US corporate, Detroit Car Parts Inc. Detroit Car Parts enters into a
Q2: Your name is Jane and you are the finance director of a US corporate, Detroit Car Parts Inc. Detroit Car Parts enters into a contract today with a Brazilian company in which Detroit Car Parts will supply car parts to the Brazilian company and the Brazilian company will pay 14 mio Brazilian Real (14,000,000 BZR) to Detroit Car Parts in nine months time. You, Jare, wish to sell, on behalf of Detroit Car Parts, 14 mio BZR nine months forward and buy USD (to pay your company's costs, salaries, rents, parts, etc). You, Jane, call up JP Morgan for a quote on the nine months forward rate for the BZR / USD (i.e., for the number of BZR per USD). JP Morgan quotes 4.90004.9100. You, Jane, decide to deal with JP Morgan. Describe what happens next. Pick the closest alternative
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