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Suppose that on 15 September 2018, you sell EUR100.000 forward for delivery on 15 January 2019. On 15 September 2018, the spot price of EUR
Suppose that on 15 September 2018, you sell EUR100.000 forward for delivery on 15 January 2019. On 15 September 2018, the spot price of EUR is $0.95 (i.e. the exchange rate is S0.95/EUR), and the forward price for delivery 4 months later is $0.92/EUR. Then on 15 January 2019, the spot price of a EUR is $0.93 and the forward price for delivery 4 months later (i.e. for delivery on 15 May 2019) is $0.94/EUR Determine your profit and loss on the transaction
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