An importer has engaged in a forward contract with a French bank to purchase GBP 60 million six months from now at a predetermined exchange rate. The agreed-upon rate for the forward contract is EUR 1.15 per GBP 1. At the end of the six-month period, the actual exchange rate turns out to be EUR 1.13 per GBP 1. Given these details, calculate the payoff for the bank from this forward contract.
Exam-Like
A
EUR -2,000,000
7.9%
B
EUR-1,200,000
27.0%
C
EUR 1,200,000
61.8%
D
EUR2,000,000
3.4%
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59. An importer has engaged in a forward contract with a French bank to purchase GBP 60 million six months from now at a predetermined exchange rate. The agreed-upon rate for the forward contract is EUR 1.15 per GBP 1. At the end of the six-month period, the actual exchange rate turns out to be EUR 1.13 per GBP 1. Given these details, calculate the payoff for the bank from this forward contract. | Financial Risk Manager Part 1 Quiz - LeetQuiz
