In December 2005,the spot exchange rate for the British Pound was 1.7188 CAD/GBP and the one-year forward rate was 1.8675 CAD/GBP. Suppose that at the same time Luther Industries entered into a contract to purchase goods with a price of £375,000 to be delivered in one year.Simultaneously Luther entered into a one-year forward contract to purchase £375,000.What is the amount of the payment in Canadian dollars that Luther Industries will have to make in one year to pay for their goods?

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The Answer of In December 2005,the spot exchange rate for the British Pound was 1.7188 CAD/GBP and the one-year forward rate was 1.8675 CAD/GBP. Suppose that at the same time Luther Industries entered into a contract to purchase goods with a price of £375,000 to be delivered in one year.Simultaneously Luther entered into a one-year forward contract to purchase £375,000.What is the amount of the payment in Canadian dollars that Luther Industries will have to make in one year to pay for their goods?

In December 2005,the Spot Exchange Rate for the British Pound