Suppose that you are a finance manager at a U.S. based MNC. On January 1st, you anticipate you will need to purchase C170,000.00 (Canadian dollars) worth of supplies from a Canadian supplier in March using Canadian dollars (C$). The current spot rate $105,400.00 an dollar is $0.73. Suppose that on February 10th, you find out your MNC no longer needs the order of Canadian supplies and, th Therefore, you wish to close out your futures position. In order to close out your futures position in Canadian dollars, you would a futures contract specifying of March 10th. If the futures contracts for Canadian dollars are priced at $0.62, then your MNC would receive date from that contract in exchange for C$170,000.00. $147,560.00 $137,020.00 $126,480.00 ed Canadian dollars. with a settlement date on the settlement Suppose that you are a finance manager at a U.S. based MNC. On January 1st, you anticipate you will need to purchase C$170,000.00 (Canadian dollars) worth of supplies from a Canadian supplier in March using Canadian dollars (C$). The current spot rate for the Canadian dollar is $0.73. Suppose that on February 10th, you find out your MNC no longer needs the order of Canadian supplies and, thus, does not need Canadian dollars. Therefore, you wish to close out your futures position. In order to close out your futures position in Canadian dollars, you would of March 10th. If the futures contracts for Canadian dollars are priced at $0.62, then your MNC would receive date from that contract in exchange for C$170,000.00. a futures contract specifying a C$170,000.00 with a settlement date on the settlement
Suppose that you are a finance manager at a U.S. based MNC. On January 1st, you anticipate you will need to purchase C170,000.00 (Canadian dollars) worth of supplies from a Canadian supplier in March using Canadian dollars (C$). The current spot rate $105,400.00 an dollar is $0.73. Suppose that on February 10th, you find out your MNC no longer needs the order of Canadian supplies and, th Therefore, you wish to close out your futures position. In order to close out your futures position in Canadian dollars, you would a futures contract specifying of March 10th. If the futures contracts for Canadian dollars are priced at $0.62, then your MNC would receive date from that contract in exchange for C$170,000.00. $147,560.00 $137,020.00 $126,480.00 ed Canadian dollars. with a settlement date on the settlement Suppose that you are a finance manager at a U.S. based MNC. On January 1st, you anticipate you will need to purchase C$170,000.00 (Canadian dollars) worth of supplies from a Canadian supplier in March using Canadian dollars (C$). The current spot rate for the Canadian dollar is $0.73. Suppose that on February 10th, you find out your MNC no longer needs the order of Canadian supplies and, thus, does not need Canadian dollars. Therefore, you wish to close out your futures position. In order to close out your futures position in Canadian dollars, you would of March 10th. If the futures contracts for Canadian dollars are priced at $0.62, then your MNC would receive date from that contract in exchange for C$170,000.00. a futures contract specifying a C$170,000.00 with a settlement date on the settlement
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Suppose that you are a finance manager at a U.S. based MNC. On January 1st, you anticipate you will need to purchase C170,000.00 (Canadian
dollars) worth of supplies from a Canadian supplier in March using Canadian dollars (C$). The current spot rate $105,400.00 an dollar is $0.73.
Suppose that on February 10th, you find out your MNC no longer needs the order of Canadian supplies and, th
Therefore, you wish to close out your futures position.
In order to close out your futures position in Canadian dollars, you would
a futures contract specifying
of March 10th. If the futures contracts for Canadian dollars are priced at $0.62, then your MNC would receive
date from that contract in exchange for C$170,000.00.
$147,560.00
$137,020.00
$126,480.00
ed Canadian dollars.
with a settlement date
on the settlement
Transcribed Image Text:Suppose that you are a finance manager at a U.S. based MNC. On January 1st, you anticipate you will need to purchase C$170,000.00 (Canadian
dollars) worth of supplies from a Canadian supplier in March using Canadian dollars (C$). The current spot rate for the Canadian dollar is $0.73.
Suppose that on February 10th, you find out your MNC no longer needs the order of Canadian supplies and, thus, does not need Canadian dollars.
Therefore, you wish to close out your futures position.
In order to close out your futures position in Canadian dollars, you would
of March 10th. If the futures contracts for Canadian dollars are priced at $0.62, then your MNC would receive
date from that contract in exchange for C$170,000.00.
a futures contract specifying a C$170,000.00 with a settlement date
on the settlement
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