Today is April 1. Koreas LG Electronics (LG) expects to receive 160,000,000 from a Japanese customer in 60 days. The current spot exchange rate is
Today is April 1. Koreas LG Electronics (LG) expects to receive 160,000,000 from a Japanese customer in 60 days. The current spot exchange rate is Won0.1250/. The current futures price for June delivery is Won0.1200/. The size of a yen futures contract is 10,000,000. How many futures contracts should LG buy or sell in order to hedge its forward obligation? What is LGs net profit or loss if the spot rate in 60 days is Won0.1400/?
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Authors: Paula H. Song, Kristin L. Reiter
3rd Edition
1567939759, 978-1567939750
