20. A French bank enters into a 6-month forward contract with an importer to sell GBP 40 million in 6 months ata rate of EUR 0.80 per GBP. If in 6 months the exchange rate is EUR 0.85 per GBP, what is the payoff for thebank from the forward contract?a. EUR -2,941,176b. EUR -2,000,000c. EUR 2,000,000d. EUR 2,941,17614 © 2015 Global Association of Risk Professionals. All rights reserved. It is illegal to reproduce this material in any format without prior written approval of GARP, Global Association of Risk Professionals, Inc.2015 Financial Risk Manager (FRM®) Practice Exam

A FRENCH BANK ENTERS INTO A 6-MONTH FORWARD CONTRACT WITH AN IMPOR...

2015 FRM PRACTICE EXAM

20.

A French bank enters into a 6-month forward contract with an importer to sell GBP 40 million in 6 months at

a rate of EUR 0.80 per GBP. If in 6 months the exchange rate is EUR 0.85 per GBP, what is the payoff for the

bank from the forward contract?

EUR -2,941,176

EUR -2,000,000

EUR 2,000,000

EUR 2,941,176

in any format without prior written approval of GARP, Global Association of Risk Professionals, Inc.

2015 Financial Risk Manager (FRM®) Practice Exam