Answer:
Don profit in the forward market can be USD 48,152.37
Explanation:
Spot rate currently is at 24.0239 MXN/USD
Sell USD forward at 26.5693 MXN/USD
Profit on settlement after 3 months = (Selling price - buying price)*Number of units
Profit on settlement after 3 months = (26.5693 - 25.3487)*1,000,000
Profit on settlement after 3 months = MXN 1,220,600
The exchange rate is expected to move to 25.3487 by Clint
Hence, 1,220,600/25.3487 = USD 48,152.37
Don profit in the forward market can be USD 48,152.37 if hewants to trade USD 1,000,000
