the following best describes the terms 'long forward position' and 'short forward position' in foreign exchange trading?   A short forward position is holding a currency for a short duration, while a long forward position is holding it for a longer period.   A short forward position means you have agreed to sell a currency in the future, while a long forward position

International Financial Management
14th Edition
ISBN:9780357130698
Author:Madura
Publisher:Madura
Chapter11: Managing Transaction Exposure
Section: Chapter Questions
Problem 1CT
icon
Related questions
Question

Which of the following best describes the terms 'long forward position' and 'short forward position' in foreign exchange trading?

 
  1. A short forward position is holding a currency for a short duration, while a long forward position is holding it for a longer period.

     
  2. A short forward position means you have agreed to sell a currency in the future, while a long forward position means you have agreed to buy it in the future.

     
  3. A long forward position is when you expect the currency's future spot rate to decrease, and a short forward position is when you expect it to increase.

     
  4. A long forward position means you have agreed to sell a currency in the future, and a short forward position means you have agreed to buy it in the future.

Expert Solution
steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Foreign Exchange Market
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Recommended textbooks for you
International Financial Management
International Financial Management
Finance
ISBN:
9780357130698
Author:
Madura
Publisher:
Cengage
Intermediate Financial Management (MindTap Course…
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Managerial Accounting: The Cornerstone of Busines…
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning