Magdalena assumes a US$ 2,000 short position in a 1-year US forward contract
(F = C$1.0312 per US).If the spot rate in one year is (a)C$1.04 per US (b)C$1.03 per US,what will her profit (loss)be in each case?

Name: Magdalena assumes a US$ 2,000 short position in a 1-year US forward contract (F = C$1.0312 per US).If the spot rate in one year is (a)C$1.04 per US (b)C$1.03 per US,what will her profit (loss)be in each case?
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Question

Quizplus · Accepted Answer

(F- S_T)n = (1.0312 - 1.04)2,000 = -17.6,(F- S_T)n = (1.0312 - 1.03)2,000 = 2.4

Magdalena Assumes a US$ 2,000 Short Position in a 1-Year