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Trader A enters into futures contracts to buy 1 million euros for 1.1 million dollars in three months. Trader B enters in a forward contract to do the same thing. The exchange rate (dollars per euro) declines sharply during the first two months and then increases for the third month to close at 1.1300. Ignoring daily settlement, what is the total profit of each trader

Respuesta :

Answer:

$30,000

Explanation:

The total profit for each trader (ignoring daily settlement) = $1,000,000 * (1.1300-1.1000)

Total profit for each trader = $1,000,000 * 0.03

Total profit for each trader = $30,000