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Problem 4

Exchange Rate Payment value($) Future value ($) Total Change


$0.18 $96,000,000

(16,000,000.00) 0 0%
$80,000,000

$0.16 $128,000,000 - 0 0%
$128,000,000

$0.15 $120,000,000

8,000,000.00 0 0%
$128,000,000

Futures Hedging Position
Importer planning to buy = 40,000,000
UTL 20

800,000,000
Exchange rate = $0.16 Per UTL
Contract = 62,500
N= 12,800 Contracts

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