Question
Animesh enters into a short position in a forward
contract where the forward price is Rs.25 and spot price at maturity is Rs.30. What will be Animesh’s payoff?Solution
For a short position, the person has agreed to sell the underlying asset at Rs.25. As such, if the spot price increases at maturity, there is a loss. Therefore, loss for the spot position is 25 – 30 = -5
More Financial Management Questions
Water from soil enters into the root hairs owing to :
The product of the equivalent weight and valency of an element equals its ______.
Why do metals conduct electricity?
Bleaching powder is represented as ______.
Which of the following vitamins is called a water-soluble vitamin?
Which of the following has the lowest ionization enthalpy?
What is the common name of sodium carbonate?
Which bond is weakest in nature?
Which is used to treat indigestion?
Flemings right hand rule is used to find the direction of the –
