If the forward contract were terminated today

Assignment Help Finance Basics
Reference no: EM132000561

3 months ago, you bought €2,000,000 1-year forward at the forward rate of 1.23 $/€. If current 9-month interest rates are 7% p.a. in the U.S. and 4% p.a. in the Eurozone, and the current spot exchange rate for euros is 1.18 $/€, then how much is your forward contract worth right now? If the forward contract were terminated today, would you expect to have to pay or receive this amount?

Reference no: EM132000561

Questions Cloud

What is the interest rate on synthetic loan : Assuming that there are no transaction costs, how could you synthetically borrow ¥100,000? What is the interest rate on your synthetic loan?
What would you do to exploit quotes : What would you do to exploit these quotes? What would be your riskless profit?
Imm index settlement prices : Mark to market a long Eurodollar futures position with June delivery at 94.75 if daily IMM Index settlement prices are
How langer connected his theoretical framework : Listed the two variables in Langers research question, and described how Langer connected his theoretical framework to these variables
If the forward contract were terminated today : If the forward contract were terminated today, would you expect to have to pay or receive this amount?
Conduct an appropriate test to model mass using waist size : BIO2POS PRACTICE OF SCIENCE ASSIGNMENT - Conduct an appropriate test to model mass using waist size. Include an appropriate graph
Why did banc one change the sign of its duration gap : Why did Banc One change the sign of its duration gap? What would have been different if there was full real-time disclosure?
Economic responsibilities - suhail bahwan automotives : Explain the concept of Corporate Social Responsibility according to Carol - Critically assess the Corporate Social Responsibility of the chosen company applying
Provide a practical use of this kind of op amp circuits : What type of a circuit does Figure 7.36 represent? Provide a practical use of this kind of Op Amp Circuits.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd