an american importer needs to pay 100,000 euros in 30 days and would like to sign a forward contract to hedge the exchange risk. should the importer buy or sell pounds through a forward contract? suppose the 30 day forward rate is $1.60/ euro and after signing the contract, the spote rate in 30 days turns out to be $1.55. how many dollars does the firm have to pay in 30 days? should the firm have not hedged?
Paper#18189 | Written in 18-Jul-2015Price : $27