n actor needs $300,000 for his vacation on October 1. He is worried about the increasing forex prices, and wants to lock the forex rate via a currency swap. He then enters a 3-month forward for 1 USD = PHP 50. On October 1, the forex rate is trading at 1 USD = PHP 48. Did the actor lose or gain profits, and by how much? (Please show your solution)
n actor needs $300,000 for his vacation on October 1. He is worried about the increasing forex prices, and wants to lock the forex rate via a currency swap. He then enters a 3-month forward for 1 USD = PHP 50. On October 1, the forex rate is trading at 1 USD = PHP 48. Did the actor lose or gain profits, and by how much? (Please show your solution)
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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An actor needs $300,000 for his vacation on October 1. He is worried about the increasing forex prices, and
wants to lock the forex rate via a currency swap. He then enters a 3-month forward for 1 USD = PHP 50. On October 1, the forex rate is trading at 1 USD = PHP 48. Did the actor lose or gain profits, and by how much? (Please show your solution)
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