easy · FRM Part 1 Financial Markets and Products
A firm enters a short forward contract on a currency. If the currency depreciates significantly against the home currency by the maturity date, how will the firm's payoff be affected?
- The firm will realize a positive payoff.
- The firm will realize a negative payoff.
- The payoff remains zero because the contract is fixed.
- The firm will only lose its initial premium.
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