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Homework answers / question archive / What is the profit/loss on a 1-Year long forward EUR contract? The size of the contract is EUR 350,000; the amount of the contract is USD 423,500; and X1USD/EUR = 1

What is the profit/loss on a 1-Year long forward EUR contract? The size of the contract is EUR 350,000; the amount of the contract is USD 423,500; and X1USD/EUR = 1

Finance

What is the profit/loss on a 1-Year long forward EUR contract? The size of the contract is EUR 350,000; the amount of the contract is USD 423,500; and X1USD/EUR = 1.16?

A. Gain USD 11,026

B. Gain USD 17,500

C. Loss USD 17,500

D. Loss USD 11,026

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Answer : Correct Option is B. Gain USD 17,500.

Reason :

Profit / Loss on 1-Year long forward EUR contract = 423500 - 406000 (350000 * 1.16) = 17500

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