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
Monique was looking for a venue for her wedding reception. When she visited one potential location, she noticed that the landscaping was not complete, and there was stained carpet in the lobby.
Answers (1)
Iceberg storage, a leading hard drive manufacturer, recently filed for bankruptcy. While most of Iceberg's competitors were shifting away from physical data storage devices toward online cloud storage services, Iceberg invested most of its retained
Answers (2)
1. Why do most companies sell shares of stock? a. All companies are required to sell shares of stock B. To let more people vote on company decisions c. To generate income for the company d. To gain a greater reputation"
Answers (2)
A batch of Raisin Bran that has been made at Kellogg's, but not yet packaged in its final cereal box would be an example of what type of inventory? a. Finished Goods b. Raw Material c. Work-in-process d.
Answers (1)
When we compare the salaries of the worst-paid members of a corporation with the salary of the ceo, what sort of measure of poverty are we using?
Answers (2)
New Questions in Business
Examples of transaction costs include (check all that apply) : A. the cost of the externality. B. the cost of monitoring an agreement. C. the cost of drafting a contract or agreement. D.
Answers (1)
Josh, Inc. is faced with the choice of either producing a newly designed product, XX-30, to stock in anticipation of demand or to customer order. The demand for the product is expected to be 5,000 units per week.
Answers (1)
Gwen is a psychologist who maintains an office in a professional suite. She often spends time doing paperwork and scheduling in her home officeWhich of the following is true?
Answers (1)
A certificate of deposit will often result in a penalty for withdrawing funds before the maturity date. If the penalty involves two months of interest, what would be the amount for early withdrawal on a $20,000, 4 percent CD?
Answers (1)
Androscoggin Copper can grow at 5% per year for the indefinite future. It's selling at $100, and next year's dividend is $5.
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?