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If the spot rate was $1.0410/C$ and the 90-day forward rate was $1.0510/C$, how much more...

If the spot rate was $1.0410/C$ and the 90-day forward rate was $1.0510/C$, how much more (in U.S. dollars) would you receive by selling C$1,521,000 at the forward rate than at the spot rate?

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Answer #1

The US dollars that we would receive more by selling C$1,521,000 is computed as shown below:

= ( $ 1.0510 - $ 1.0410 ) x C$ 1,521,000

= $ 15,210

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