Question
Suppose you need to pay V = 50,000 GBP in a year from now. Spot rate of GBP is 1.3. You do not have enough
Suppose you need to pay V = 50,000 GBP in a year from now. Spot rate of GBP is 1.3. You do not have enough USD to purchase 50,000 GBP right now. Assume the forward premium = 0.03
What is the benefit of hedging with forward contract if the GBP spot rate in a year from now is 1.3?
the answer is not 1500
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The Handbook Of Traditional And Alternative Investment Vehicles Investment Characteristics And Strategies
Authors: Mark J. P. Anson, Frank J. Fabozzi, Frank J. Jones
1st Edition
0470609737, 978-0470609736
