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The British Pound is currently trading at $1.20. The market consensus (best guess) is that on December 15 it will most likely be trading at
The British Pound is currently trading at $1.20. The market consensus (best guess) is that on December 15 it will most likely be trading at $1.30. The most likely current exercise/strike price for a British Pound call expiring on December 15 is $ O 1.15 O 1.45 O 1.30 1.35 O 1.05 O 1.10 O 1.20 o 1.00 O 1.40 1.50 1.25 We'R'SlightlyNervous, a US-based MNC, will need 500,000 a year from now, and decides to lock into a rate of 2.00$/ and purchase a forward contract right now. A year later, at the time when the delivery on the forward contract is made, the spot exchange rate turns out to be 1.85$/. The company, by purchasing the forward contract instead of waiting to buy the at the spot rate, (saved/lost) $ Lost $25,000 Lost $50,000 Lost $75,000 Saved $50,000 Saved $100,000 O Lost $100,000 O Saved $25,000 Neither saved nor lost Saved $75,000
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