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You've signed a contract to provide computer generated animations to a French movie company. The company has agreed to your price of $70,000, but
You've signed a contract to provide computer generated animations to a French movie company. The company has agreed to your price of $70,000, but is not willing to bear the exchange rate risk. Instead, they will pay you 53,846 euros 6 months from now. The spot exchange rate is 1.3 dollars per euro and the 6-month forward exchange rate is 1.34 dollars per euro. Part 1 Attempt 1/10 for 10 pts. If the spot exchange rate will be 1.39 dollars per euro in 6 months, how many dollars will you receive? 0+ decimals Submit Part 2 Attempt 1/10 for 10 pts. If you buy a forward contract now, how many dollars will you receive in 6 months? 0+ decimals Submit
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