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A Firm Sells AUD1 Million, Twelve Months Forward at the USD/AUD

Question 15

Multiple Choice

A firm sells AUD1 million, twelve months forward at the USD/AUD exchange rate of 0.5000. The spot rate at settlement is 0.5100.
How much will the firm gain or lose on the forward contract?


A) -AUD10 000
B) -USD10 000
C) AUD10 000
D) USD10 000

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