Assume that Loblaws negotiated a forward contract to purchase 200,000 British pounds in 90 days. The 90- day forward rate was $1.4025 per British pound. The pounds to be purchased were to be used to purchase British supplies. On the day the pounds were delivered by the bank in accordance with the forward contract, the spot rate of the British pound was $1.4450. What is the gain or loss for Loblaws?
Assume that Loblaws negotiated a forward contract to purchase 200,000 British pounds in 90 days. The 90- day forward rate was $1.4025 per British pound. The pounds to be purchased were to be used to purchase British supplies. On the day the pounds were delivered by the bank in accordance with the forward contract, the spot rate of the British pound was $1.4450. What is the gain or loss for Loblaws?
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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Assume that Loblaws negotiated a forward contract to purchase 200,000 British pounds in 90 days. The 90- day forward rate was $1.4025 per British pound. The pounds to be purchased were to be used to purchase British supplies. On the day the pounds were delivered by the bank in accordance with the forward contract, the spot rate of the British pound was $1.4450. What is the gain or loss for Loblaws?
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