Question 21.3: Looking Forward Suppose you are expecting to receive a mill...

Fundamentals of Corporate Finance Standard Edition

Looking Forward

Suppose you are expecting to receive a million British pounds in six months, and you agree to a forward trade to exchange your pounds for dollars. Based on Figure 21.1 , how many dollars will you get in six months? Is the pound selling at a discount or a premium relative to the dollar?

21.1

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