You take a long position on a forward contract on GBP 30,000 at the rate F(USD/GBP)...

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You take a long position on a forward contract on GBP 30,000 at the rate F(USD/GBP) = 1.25. The initial performance bond is $1,500,000 while the maintenance performance bond is $1,300,000. Fill out the table below and compute the total gain/loss using the three methods. t S($/) 0 1 1.2485 $ 2 1.2431 $ GAIN/LOSS $ BALANCE ADDITION $ $ $ $ $ $ $ 3 1.2438 $ $ $ $ TOT BALANCE You take a long position on a forward contract on GBP 30,000 at the rate F(USD/GBP) = 1.25. The initial performance bond is $1,500,000 while the maintenance performance bond is $1,300,000. Fill out the table below and compute the total gain/loss using the three methods. t S($/) 0 1 1.2485 $ 2 1.2431 $ GAIN/LOSS $ BALANCE ADDITION $ $ $ $ $ $ $ 3 1.2438 $ $ $ $ TOT BALANCE

Answer rating: 100% (QA)

Forward Contract Performance Table Spot Rate USDGBP GainLoss Balance Addition Tot Balance 125 0 1500000 0 1500000 12485 1125 1501125 0 1501125 12431 4... View the full answer