A foreign exchange trader with a U.S. bank took a short position of 5,000,000 when the $/
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A foreign exchange trader with a U.S. bank took a short position of £5,000,000 when the $/£ exchange rate was 1.55. Subsequently, the exchange rate has changed to 1.61. Is this movement in the exchange rate good from the point of view of the position taken by the trader? By how much has the bank’s liability changed because of the change in the exchange rate.
Exchange RateThe value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...
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The increase in the exchange rate implies that the pound has ...View the full answer
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Related Book For 
International Financial Management
ISBN: 978-1259717789
8th edition
Authors: Cheol Eun, Bruce G. Resnick
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