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Lirio Co
How the lock in rate calculation is done for futures contract calculation.
lock in rate = opening future price + (spot – future ) * 1/4.
please show the workings ? I tried to calculate. But couldnt using this formula
0.8656+ (1.1618 – 0.8656 ) *1/4What you have missed is the fact that the spot rate is quoted as per €, whereas the futures are quoted at € per $.
So you need to restate the spot rate in € per $ as well. So the spot rate to use is 1/1.1618 = 0.8607.
Then carry on with the workings as you were doing, and you will end up with the same figure as in the answer 🙂
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