alleryStart learning →A firm is short 500 units under a forward at 120 per unit. The spot at maturity is 105. What is the outcome?
ALoss of 7,500
BLoss of 15
CGain of 15
DGain of 7,500
Answer & Solution
Correct answer: D. Gain of 7,500
Short payoff is delivery price minus spot: (120 - 105) x 500 = 7,500 gain.
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