An investor enters into a short futures contract to sell 100,000 British pounds for US dollars...
An investor enters into a short futures contract to sell 100,000 British pounds for US dollars at an exchange rate of 1.20 US$ per GBP. How much does the investor gain or lose if the exchange rate at the end of the contract is 1.35?
Homework Answers
Here dollar has depreciated.
So loss on short sell = (1.20 - 1.35) x 100000 = -15000
Answer : - $15000 [ loss of 15000 dollars] [Thumbs up please]
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