Determine the total dollar amount of profit (loss) from this futures contract based on expectation Argentine peso

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Question:

Determine the total dollar amount of profit (loss) from this futures contract based on expectation Argentine peso will be worth $0.41 in one year.

Given the following:

Spot Rate Argentine Peso$0.39

One-year interest rate U.S.7 percent

One-year Argentine interest rate12 percent

Futures price = forward price

Interest rate parity exists

Investor purchased futures contracts on Argentine Peso representing 1,000,000 pesos.

Related Book For answer-question

International financial management

ISBN: 978-1133947837

12th edition

Authors: Jeff Madura

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Posted Date: May 13, 2024 02:13 AM

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Determine the total dollar amount of profit (loss) from this futures contract based on expectation Argentine peso

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International financial management

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