Find the contract value, A corporation wants a three month

Find the contract value

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Reference no: EM131978487

The current dollar/Deutsche Mark spot exchange rate is 0.5685. If you invested one dollar for three months in the domestic riskless asset you would earn $1.0101, and if you invested one mark for three months in the German riskless asset you would earn 1.0113 marks. A corporation wants a three month forward contract to buy 1 million marks at the spot exchange rate of 0.54 $/DEM. Find the contract value. (Hint-find the domestic and risk free rates from the data using your log key)

Reference no: EM131978487

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