Ask Question
BusinessBusiness
10 May, 09:10

On July: On July 1, 2017, a company enters into a forward contract to buy 10 million Japanese yen on January 1, 2018. 1, 2017, a company enters into a forward contract to buy 10 million Japanese yen on January 1, 2018. On September 1, 2017, it enters into a forward contract to sell 10 million Japanese yen on January 1, 2018. Describe the payoff from this strategy.

+1
Answers (1)
  1. 10 May, 09:28
    0
    The reward in this strategy will depend on the international price at which the Yen is placed in the purchase and sale periods.

    Example:

    If in July it enters into a contract to buy the 10 million Japanese Yen on January 1, 2018. At a price of 100 Yen per dollar.

    Then in September the Yen does not cost 100 per dollar but it costs 108 Yen per dollar. Then I sell what I received in the first contract at a more expensive price and I will get a profit by exchange rate.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “On July: On July 1, 2017, a company enters into a forward contract to buy 10 million Japanese yen on January 1, 2018. 1, 2017, a company ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Sally received $50,000 of compensation from her employer and she received $400 interest from a corporate bond. What is the amount of Sally's gross income from these items? A) $400 B) $50,000 C) $50,400
Answers (1)
Suppose an economy has $200,000 of demand deposits and $40,000 of excess reserves with a 10% required reserve ratio. If the monetary authorities raise the required reserve ratio to 20%, then which of the following will likely follow? A.
Answers (2)
Read the sentence that appears in an argumentative essay about american public education. millions of dollars have been spent by taxpayers on programs to improve education.
Answers (2)
The market price for tennis balls is currently $2 At this price, a firm is willing and able to produce 80 tennis balls. However, at this level of production, the firm experiences an average total cost of $0.50 per tennis ball.
Answers (1)
Marciano Manufacturing uses a standard cost system. Standards for direct materials are as follows: Direct materials (pounds per unit of output) 3 Cost per pound of direct materials $ 6 The company plans to produce 2 comma 000 units and has purchased
Answers (1)
New Questions in Business
How do property rights benefit entrepreneurs? by enabling them to purchase capital and use it as they see fit by allowing them to use their employees' property by facilitating the use of public property for private businesses by freeing unused
Answers (1)
The manufacturing overhead budget at Foshay Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 7,200 direct labor-hours will be required in May. The variable overhead rate is $8.90 per direct labor-hour.
Answers (1)
Genepa Corporation manufactures home appliances and other electronic products. Genepa is planning to introduce a new refrigerator model.
Answers (1)
Indirect costs are traced to cost objects. Cost drivers are used to allocate indirect costs to cost objects. An allocation rate is calculated by dividing the allocation base by the total cost to be allocated.
Answers (1)
What is the process of optimizing the contributions of people from different cultures in the workplace
Answers (1)
Home » Business » On July: On July 1, 2017, a company enters into a forward contract to buy 10 million Japanese yen on January 1, 2018. 1, 2017, a company enters into a forward contract to buy 10 million Japanese yen on January 1, 2018.
Sign Up Forgot Password?