Answer:
A. Lost $100
Explanation:
Short position refers to a trading technique which involves selling the currency for it to buy later and make a profit.
To calculate the loss if you don't have a forward contract:
Your loss will be
= €1,000 x ($1.50/€ - $1.60/€)
= $100
Answer:
Answer is A. Lost $100.
Refer below for the explanation.
Explanation:
Short position includes selling the money.
You will get (1.5 × 1,000) = $1,500.
In any case, you could get (1.6 × 1,000) = $1,600
In the event that you didn't have the forward agreement.
So you lost $1,600 - $1,500 = $100.
