An energy company located in Russia has entered into a contractto export natural gas into Europe wit
An energy company located in Russia has entered into a contractto export natural gas into Europe wit | savvyessaywriters.org
An energy company located in Russia has entered into a contractto export natural gas into Europe with delivery in three months.The contract is denominated in EUR and is valued at EUR100 million.The spot exchange rate is EUR/RUB49.2820. Assume that the spot ratein three months’ time is EUR/RUB46.6060 and that there is no basisrisk between the futures market and the spot FX markets.
a) Set up a hedging strategy using the futures market. Show yourcalculations. Explain the outcomes of the strategy. Assume that EURfutures have a face value of EUR 100,000 per contract . . .
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