in the question, receipt US 20m in 4 month time, using futures hedge.
So the method should buy (long) the futures. However, the result of the 4 month predict rate is worse than the 4 month forward rate. Therefore we dont do the futures hedge.
** I have a question about this, why i should long the futures because the exchange rate likely linear going up 2 month expiry at 1.3633, and 5 month expirty at 1.3698.
Can i use speculation view ,buy the future contract now (spot rate 1.3618, assume : 1,3625 (1.3633-1.3618)/2 + 1.3625 and sell in the 5 months, then i can make profit .
thank you very much
So the method should buy (long) the futures. However, the result of the 4 month predict rate is worse than the 4 month forward rate. Therefore we dont do the futures hedge.
** I have a question about this, why i should long the futures because the exchange rate likely linear going up 2 month expiry at 1.3633, and 5 month expirty at 1.3698.
Can i use speculation view ,buy the future contract now (spot rate 1.3618, assume : 1,3625 (1.3633-1.3618)/2 + 1.3625 and sell in the 5 months, then i can make profit .
thank you very much