The 6-month forward rate for Euro is 1.6003 Canadian dollars per Euro. The spot rate is 1.5992 Canadian dollars per Euro. With a forward contract, how many Canadian dollars will be received for 50,000 Euros in six months?

Question

Quizplus · Accepted Answer

To calculate the amount of Canadian dollars received in 6 months, we use the formula:

Forward rate * amount of Euros = amount of Canadian dollars

So, 1.6003 * 50,000 = 80,015 Canadian dollars.
Therefore, the answer is C: $80,015.

The 6-Month Forward Rate for Euro Is 1