An american importer needs to pay 100000 in 30 days and, Financial Management

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An american importer needs to pay 100000 in 30 days and

An American importer needs to pay £100,000 in 30 days and would like to sign a forward contract to hedge the exchange rate risk. Should the importer buy or sell pounds through a forward contract? Suppose the 30-day forward rate is $1.60/£ and after signing the contract the spot rate in 30 days turns out to be $1.55/£. How many dollars does the firm have to pay in 30 days? Should the firm have not hedged?

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Financial Management: An american importer needs to pay 100000 in 30 days and

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