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A Canadian importer has ordered $2,000,000 US worth of customized Microsoft Office 365 to be delivered...

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Finance

A Canadian importer has ordered $2,000,000 US worth ofcustomized Microsoft Office 365 to be delivered in six months. Thecurrent spot exchange rate is $1.50 CAD = $1.00 USD. However, theimporter fears that the Canadian dollar (CAD) will depreciate to$1.55 CAD = $1.00 USD in the next 6 months. As a result, theimporter purchases $1,000,000 USD at today’s prevailing six-monthforward rate of $1.52 CAD = $1.00 USD. What is the savings to theimporter from his dealings in the forward market(assume his fearscomes true in the next 6 months)? (a) $60,000 USD. (b) $60,000 CAD.(c) $100,000 CAD. (d) $40,000 CAD.

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A Canadian importer has ordered 2000000 US worth of customized Microsoft Office 365 to be delivered in six months Therefore amount required in six months 2000000 USD The current spot exchange rate    See Answer
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