Here are direct spot and forward markets quotes for MXN over three points in time: now (1/1/XX), one month later (2/1/XX), three months later (4/1/XX), and six months later (7/1/XX). 1/1/XX 0.0891 MXN Spot 1 Month Forward 0.0904 3 Month Forward 0.0918 6 Month Forward 0.0932 2/1/XX 4/1/XX 0.0949 0.0900 0.0963 0.0914 0.0977 0.0928 0.0992 0.0942 O Loss of $4,500 Profit of $5,900 O Profit of $4,500 O Loss of $5,900 7/1/XX 0.0955 0.0969 0.0984 0.0999 On 1/1/XX, IBM bought a 1 month forward contract of MXN 1,000,000 from Bank One. As a result, IBM will incur a when the contract expires.
Here are direct spot and forward markets quotes for MXN over three points in time: now (1/1/XX), one month later (2/1/XX), three months later (4/1/XX), and six months later (7/1/XX). 1/1/XX 0.0891 MXN Spot 1 Month Forward 0.0904 3 Month Forward 0.0918 6 Month Forward 0.0932 2/1/XX 4/1/XX 0.0949 0.0900 0.0963 0.0914 0.0977 0.0928 0.0992 0.0942 O Loss of $4,500 Profit of $5,900 O Profit of $4,500 O Loss of $5,900 7/1/XX 0.0955 0.0969 0.0984 0.0999 On 1/1/XX, IBM bought a 1 month forward contract of MXN 1,000,000 from Bank One. As a result, IBM will incur a when the contract expires.
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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Question
f1.
Subject :- Finance
Transcribed Image Text:Here are direct spot and forward markets quotes for MXN over three points in time: now (1/1/XX), one
month later (2/1/XX), three months later (4/1/XX), and six months later (7/1/XX).
1/1/XX
MXN Spot
0.0891
1 Month Forward 0.0904
3 Month Forward
0.0918
6 Month Forward 0.0932
2/1/XX 4/1/XX
0.0949
0.0900
0.0963
0.0914
0.0977 0.0928
0.0992 0.0942
O Loss of $4,500
Profit of $5,900
O Profit of $4,500
O Loss of $5,900
7/1/XX
0.0955
0.0969
0.0984
0.0999
On 1/1/XX, IBM bought a 1 month forward contract of MXN 1,000,000 from Bank One. As a result,
IBM will incur a
when the contract expires.
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