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I am not sure which to use;
Three-month forward rates $1·1559–$1·1601
Receiving 20 million euros.
Can anyone help? Thanks.
You are missing the other CCY in your forex.
Is the rate expressed in USD/ EUR or EUR/ USD?
Let’s say it’s real life and that would be USD/ EUR. In this case you sell the contract currency to the bank, so you use the first rate. You multiply the 20 Mio EUR to the first rate.
You can easily asses this, as you will get less USD than if you used the other rate. The bank always wins!
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