Question

A company based in the United States is expecting to receive a payment of 10 million euros in next two months. The company is concerned about the fall in the value of euros and is thinking of entering into a forward contract to hedge the position. What will be the value of 10 million euros in US dollars, if the company hedges the position of exchange rate risk with a forward contract of 1.5 USD/EURO

A 10 million USD
B 10 million Euro
C 15 million USD
D Can’t say
E None of the above
Practice Next

Hey! Ask a query