Negotiating a forward contract


Problem: Graylon, Inc., based in Washington, exports products to a German firm and will receive payment of ?200,000 in three months. On June1, the spot rate of the euro was $1.12, and the 3-month forward rate was $1.10. On June 1, Graylon negotiated a forward contract with a bank to sell ?200,000 forward in three months.The spot rate of the euroon September 1 is $1.15. Graylon will receive $_________ for the euros.

A) 224,000

B) 220,000

C) 200,000

D) 230,000

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Business Law and Ethics: Negotiating a forward contract
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