Last year, your company sold electronic products to Brazil. You are expecting to receive Real 2,000,000...

 

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Last year, your company sold electronic products to Brazil. You are expecting to receive Real 2,000,000 in 6 months. The following quotations are provided by a currency dealer: In $ Real 0.4200 1 m. forward 0.4210 3 m. forward 0.4350 6 m. forward 0.4115 per $ 2.3810 2.3753 2.2989 2.4301 Is this an unhedged payable or receivable position? If the spot rate in 6 months is $0.3900/ Real, what would be your profit/loss for your unhedged position (based on the related forward rate quotation)? Last year, your company sold electronic products to Brazil. You are expecting to receive Real 2,000,000 in 6 months. The following quotations are provided by a currency dealer: In $ Real 0.4200 1 m. forward 0.4210 3 m. forward 0.4350 6 m. forward 0.4115 per $ 2.3810 2.3753 2.2989 2.4301 Is this an unhedged payable or receivable position? If the spot rate in 6 months is $0.3900/ Real, what would be your profit/loss for your unhedged position (based on the related forward rate quotation)?

Answer rating: 100% (QA)

To determine whether this is an unhedged payable or receivable position we need to compare the forwa... View the full answer