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Compare and contrast forward and futures contracts

Compare and contrast forward and futures contracts



1. Implications of PPP. Today- spot rate of the Mexican peso is $.10. Assume that purchasing power parity holds. The U.S. inflation rate over this year is expected to be 7%, while the Mexican inflation over this year is expected to be 3%. Wake Forest Co. plans to import from Mexico and will need 20 million Mexican pesos in one year. Determine the expected amount of dollars to be paid by the Wake Forest Co. for the pesos in one year.
2.	Forward versus Futures Contracts. Compare and contrast forward and futures contracts.



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23 Apr 2016

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    Compare and contrast forward and futures contracts

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