Consider the spot and forward FX quotes in dollars. Spot: 54.10 30-day forward: 54.90 60-day forward: 55.40 90-day forward: 56.00 On April 3, 2023, Ford enters in a 3-month long forward contract to buy $10,000,000 at ₱56.00 per 1 USD to Rangers Corporation. After 90 days, the exchange rate is at ₱58.00. How much will Ford pays at the end of the 90-day contract? Who will be the gainer and loser in the forward contract? How much did they gain and lose?
Consider the spot and forward FX quotes in dollars. Spot: 54.10 30-day forward: 54.90 60-day forward: 55.40 90-day forward: 56.00 On April 3, 2023, Ford enters in a 3-month long forward contract to buy $10,000,000 at ₱56.00 per 1 USD to Rangers Corporation. After 90 days, the exchange rate is at ₱58.00. How much will Ford pays at the end of the 90-day contract? Who will be the gainer and loser in the forward contract? How much did they gain and lose?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Consider the spot and forward FX quotes in dollars.
- Spot: 54.10
- 30-day forward: 54.90
- 60-day forward: 55.40
- 90-day forward: 56.00
On April 3, 2023, Ford enters in a 3-month long forward contract to buy $10,000,000 at ₱56.00 per 1 USD to Rangers Corporation. After 90 days, the exchange rate is at ₱58.00.
- How much will Ford pays at the end of the 90-day contract?
- Who will be the gainer and loser in the forward contract? How much did they gain and lose?
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