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A US-based exporter anticipated receiving 100 million EURO in six months, and took a long forward...

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Finance

A US-based exporter anticipated receiving 100 million EURO insix months, and took a long forward position, locking-in anexchange rate of $1.3/EURO. If six months later at maturity, theexporter calculates that she has made a profit of $14 million fromthe currency forward contract, the spot exchange rate at maturitymust be __________ USD/EURO

Round your final answers to TWO decimalpoints.

Answer & Explanation Solved by verified expert
4.2 Ratings (671 Votes)
Notes exchange rate at maturity must be 116 USDEURO is in question format but in standard format USDEURO means USD 1 EURO in standard format in would 1116 EURO 086 per USD Solution The spot    See Answer
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Transcribed Image Text

A US-based exporter anticipated receiving 100 million EURO insix months, and took a long forward position, locking-in anexchange rate of $1.3/EURO. If six months later at maturity, theexporter calculates that she has made a profit of $14 million fromthe currency forward contract, the spot exchange rate at maturitymust be __________ USD/EURORound your final answers to TWO decimalpoints.

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