The spot rate of the Euro is $1.45 (i.e. 1 EUR = 1.45 USD) and...
60.1K
Verified Solution
Link Copied!
Question
Accounting
The spot rate of the Euro is $1.45 (i.e. 1 EUR = 1.45 USD) and the one-year futures price on the EUR trades a discount of 5.1%. You take out a short position in three futures contracts on EUR expiring in one year's time. In one year's time, the EUR's value has depreciated against the USD by 3.7%. A futures contract is for 16,000,000 EUR. Determine the total dollar amount of profit or loss from your position.
| a. | Loss of $324,800 | |
| b. | Profit of $324,820 | |
| c. | Profit of $974,400 | |
| d. | Loss of $974,400 |
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Best
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.