Trader A takes a short position in a 90-day forward contract on 1 million British pounds. Trader B takes a short position in a 90-day futures contract on 1 million British pounds. The forward price is 1.600 $/GBP. The futures price is also 1.600 $/GBP. At the end of 3-month period, exchange rate is 1.654 $/GBP. 

• What is the gain/loss realized by Trader A? 

• What is the gain/loss realized by Trader B? 

• When does trader A realize the gain/loss? 

• When does trader B realize the gain/loss?

Answer rating: 100% (QA)

GainLoss Realized by Trader A Trader A entered into a short forward contract at a rate of 1600 GBP A... View the full answer