A firm has a payable of C$ 4,000,000.00. They hedge this exposure with a forward participation contract with a guaranteed rate of $1.5500/C$ and a participation rate of 25%. If at the time of payment the spot price ends up equal to $1.6275/C$. How much will the firm have to pay?

Answer rating: 100% (QA)

To calculate the amount the firm will have to pay we need to consider the forward participation cont... View the full answer