登录之后可查看解析

(a) (i) The following are advantages of forward exchange contracts for the UK exporter.
1 It can fix an amount of sterling income that it will receive from the export transaction,
and so can predict with certainty the profit or loss it will make on the transaction.
2 It will also know exactly how much money it will receive, and so can forecast its cash
flows with greater accuracy.
3 Selling dollars forward provides a 100% hedge against the risk of a fall in the value of
the dollar between the date of making the transaction and the date of eventually
receiving the dollar income. Forward exchange contracts are an important instrument
for hedging currency risk for both exporters and importers.
(ii) Assuming the company enters into forward contracts to sell dollars to its bank at 1.4900 in
one month and 1.4840 in three months it will receive the following amounts in sterling.

(iii) Without hedging, the company would have received:

Since the spot value of the dollar has declined, the company will receive about £526 less.
Depending on the size of the profit margin on the export transaction, this could have a
significant effect on the company's trading profit.
(iv) Transactions in currency futures are available on some futures exchanges. Currency futures
are very similar in concept to forward exchange contracts, the main difference being that
futures contracts are standardised exchange-traded instruments and are not tailored to the
specific needs of someone wanting to buy or sell currency. Currency futures are therefore used
mainly for large currency transactions, for example by banks. The use of currency futures by
trading companies is uncommon, certainly outside the US.