The cost in dollars if you use the forward hedge

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Reference no: EM131513226

While you were visiting London this past weekend, you purchased a Jaguar for 70,000 (pounds). The Jaguar will be delivered to you later. The payment of 70,000 (pounds) is due exa,ctly in three months. You would like to lock in the cost of the 70,000 pounds now, annd have decided to use a forward contract to hedge. The current spot exchange rate is $1.68/pound. The three month forward exchange rate is $1.70/pound. What will be the cost in dollars if you use the forward hedge?

a. $117,000

b. $119,000

c. $41,176.47

d. $41,666.67

Reference no: EM131513226

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