Question
The interest rate in Angola is 20.76%. The interest rate in Lesotho is 29.47%. The currency in Lesotho is called the Loti. The currency in
The interest rate in Angola is 20.76%. The interest rate in Lesotho is 29.47%. The currency in Lesotho is called the Loti. The currency in Angola is called a Kwanza. The current rate is 1 Loti equals 39.88 Kwanzas.
A company in Angola will receive 3,667 Lotis 5 months from now. The company has an existing short forward contract where the 3,667 Lotis will be exchanged/sold at a rate of 1 Loti for 40.06 Kwanzas 5 months from now.
What is the value of the existing forward in Kwanzas?
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Financial Sector Reform And Privatization In Transition Economies
Authors: John Doukas, Victor Murinde, Clas Wihlborg
1st Edition
044482653X, 9780444826534
