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The Argentina peso (P) spot rate, relative to $, is at P 2.75/$ and the sh-month forward rate is P 2.90 /5. The actual rate
The Argentina peso (P) spot rate, relative to $, is at P 2.75/$ and the sh-month forward rate is P 2.90 /5. The actual rate settles six months later at P 2.85/$. If you entered into a (cash settled) six-month non-deliverable forward contract today to buy P 29 million, what is your gain or loss 6 months later? a. Gain of $175,438 O b. Loss of $545,454.55 O c. Gain of $545,454.55 d. Loss of $175,438 QUESTIONS Patti is a U.S.-based treasurer with $1,000 to invest. The $- exchange rate is quoted as $1.20 = 1.00 and the $ - exchange rate is quoted at $1.40 = 51.00. If a bank quotes Patti a cross rate of 1.00 = 1.15 how much money can Patti make if she goes from $ to to and back to $? a. $18.25 b. No arbitrage is possible c. $13.39 d. $14.49
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