Question
You are an American ($) importer buying from England (L). The transaction size is 210,000 Pounds due in 2 months. Futures contracts come in 62,500
You are an American ($) importer buying from England (L). The transaction size is 210,000 Pounds due in 2 months. Futures contracts come in 62,500 L increments. How much would you eventually pay for the goods if you hedged with futures given the following data. All numbers are $/L. Note if you pay 100L, the answer is 100, not -100.
| Now | 2 months from now | |||
| Spot | 1.280 | 1.291 | 1.348 | 1.356 |
| Futures | 1.305 | 1.359 |
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Introduction To Personal Finance
Authors: John E Grable, Lance Palmer
1st Edition
1119626633, 9781119626633
