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Suppose That XYZ International Company Has Purchased a Swiss Francs

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Suppose that XYZ International Company has purchased a Swiss francs futures contract (contact size is SFr 125,000)at a price of $0.8250 at $0.83.If the spot rate for the Swiss franc at the date of settlement is SFr = $0.8250,what is the Company's gain or loss on the contract?


Definitions:

American Option

A type of options contract that can be exercised at any time before its expiration date.

Expiration Date

In finance, it refers to the date on which a financial instrument (e.g., options, futures) ceases to be valid and the right to exercise it no longer exists.

Exercised

In finance, most commonly refers to the act of utilizing one's right to buy or sell an underlying financial instrument, such as stocks, as specified in a contract.

Put Option

A financial contract giving the option buyer the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified time frame.

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