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You enter an NDF to buy UYU (Uruguayan Peso) for $.0363/UYU. The contract size is UYU50,000,000 and the contract matures in six months. a) If

You enter an NDF to buy UYU (Uruguayan Peso) for $.0363/UYU. The contract size is UYU50,000,000 and the contract matures in six months.

a) If the spot rate is $.0381/UYU in six months, will you owe the bank money, or will the bank owe you money? How much in total?

b) If the spot rate is $.0346/UYU in six months, will you owe the bank money, or will the bank owe you money? How much in total?

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