Question
Your small multinational US business forcasts 500,000 Euro in revenue for sales of your products in France in 6 months. The 6 month EUR forward
Your small multinational US business forcasts 500,000 Euro in revenue for sales of your products in France in 6 months. The 6 month EUR forward rate is 1.20. You are thinking of hedging 100% of the exposure using a forward contract. If the actual exchange rate in 6 months is 1.05, then what would be the US dollar gain or loss on your hedge (step 2)?
| $90,000 gain | ||
| ($75,000) loss | ||
| $75,000 gain | ||
| $0 gain or loss |
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Financial Markets and Institutions
Authors: Jeff Madura
12th edition
9781337515535, 1337099740, 1337515531, 978-1337099745
