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Doubt in December 2018 paper.

DDeepika6y ago
Hello sir, How we will calculate thr futures price in Question 2 of December 2018 paper..??
John MoffatJohn MoffatTutor6y ago#1
In future, if you want me to answer then you must ask in the Ask the Tutor Forum - this forum is for students to help each other. Given that we do not know the spot rate or the futures price at the date of the transaction, we use the 'lock-in rate' (which gives the net effect of converting at spot together with the gain or loss on the futures). I explain how we calculate the lock-in rate (and the logic of it) in my free lectures on foreign exchange risk management.
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