Today on 16 March 2021, a US company gets an export order from a customer based in Spain worth Euro€ 15,575000. Revenue
Posted: Wed May 18, 2022 10:01 pm
Today on 16 March 2021, a US company gets an export order from a
customer based in Spain worth Euro€ 15,575000. Revenue will be
received in three months. Today on 16 March 2021, it enters the
currency future contract at State Bank for Euro€ 15,575000 at the
exchange rate Euro€1 = $0.97. On 17 March 2021 currency future
price rises to Euro€1 = $1.00. On 18 March 2021 currency future
price falls to Euro€1 = $0.88, whereas, on 19 March, the price
rises to Euro€1 = $0.92 and subsequently, the US company decides to
close its position. Calculate gain/loss of the US
Company.
customer based in Spain worth Euro€ 15,575000. Revenue will be
received in three months. Today on 16 March 2021, it enters the
currency future contract at State Bank for Euro€ 15,575000 at the
exchange rate Euro€1 = $0.97. On 17 March 2021 currency future
price rises to Euro€1 = $1.00. On 18 March 2021 currency future
price falls to Euro€1 = $0.88, whereas, on 19 March, the price
rises to Euro€1 = $0.92 and subsequently, the US company decides to
close its position. Calculate gain/loss of the US
Company.