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Hi Dear John,
The answer for Dec 2018 Q2 (a) asked for higher receipts. My question is about futures part.
Normally the total receipt is spot rate on transaction + gan/loss on futures, but here we don’t have spot rate.
The answer multiplies the number of CHF contracts by calculated May future price. Why is that? Since June future has been used for hedging, isn’t the June future price the fixed guaranteed receipt?
Sorry if the question is dumb (.Dear John,
pls disregard the question, understood it was the lock-in concept. Thnks anyway!
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