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A foreign exchange dealer in Warsaw provides quotes for spot and 3-month forward rates for the Polish zloty against the dollar.

Bid (PZ/$)

Ask (PZ/$)

 

Spot

4.0040

4.0200

3-month forward

3.9690

3.9888

a. What would you receive in dollars if you sold PZ 5 million at the spot rate?

b. What would it cost in dollars to purchase PZ 20 million forward three months. When would you make payment?

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