What is the profit/loss on a 1-Year long forward EUR at t=1 when X1USD/EUR = 1.28; F1USD/EUR = 1.22 and the size of the contract is EUR 350,000?

Assume you want a short position in AUD in a 1-Year USD/AUD contract. You calculate the synthetic forward at FY1USD/AUD = 0.85 and your banker quotes you F1USD/AUD = 0.82. Do you choose the actual forward contract or the synthetic forward? Synthetic forward Makes no difference Do not have enough information to answer question Actual forward

Compute the mark-to-market value of the following long forward NZD (New Zealand Dollar) contract. The size of the long position is NZD 450,000 and the forward rate is FNUSD/NZD = 0.66 ; the current spot rate (at time of valuation) X0USD/NZD = 0.64. The NZD and USD interest rates are: rNZD = 9% and rUSD = 3%; assume the contract matures in two years from now (so at t=2).

Compute the mark-to-market value of the following short forward GBP contract. The size of the contract is GBP 3,800,000 and the forward rate is F3USD/GBP = 1.34; the spot rate at time of the valuation (today) is XNUSD/GBP = 1.20. The GBP and USD interest rates are: rGBP = 5% and rUSD = 4% ; assume the contract matures three years from now (so at t=3).

Compute the mark-to-market value of the following short forward NZD (New Zealand Dollar) contract. The size of contract is NZD 5,000,000 and the forward rate is F4USD/NZD = 0.79; the spot rate at time of the valuation (today) is XNUSD/NZD = 0.71. The NZD and USD interest rates are: rNZD = 8% and rUSD = 2%; assume the contract matures in four years from now (so at t=4).

Norse Inc. a U.S. based exporter that exclusively sells its products in Great Britain. Norse, expects to sell 2,000 units at a price of GBP 10.00 per unit. Norse currently produces in Highland Heights, KY and has a variable production cost of USD 8.10 per unit, and total fixed costs of USD 5,000. Use an expected XUSD/GBP = 1.35. What is Norse's expected cash flow from operations?

Norse Inc. a U.S. based exporter that exclusively sells its products in Great Britain. Norse, expects to sell 2,000 units at a price of GBP 10.00 per unit. Norse currently produces in Highland Heights, KY and has a variable production cost of USD 8.10 per unit, and total fixed costs of USD 5,000. What is Norse's FX operating exposure?

Answer rating: 100% (QA)

1 ProfitLoss on 1Year long forward EUR Given X1USDEUR 128 F1USDEUR 122 Contract size EUR 350000 To calculate profitloss on a long forward contract we use the formula ProfitLoss Forward rate at maturit... View the full answer