Hi guys,

I hope someone could help me with the following assignment...

You have invested 10 Mn EUR in a Czech company at a FX rate of 25,5 EURCZK. The FX rate appreciates to 22,1 EURCZK. How large is your Profit/Loss resulting from this FX move? Due to your economic assessment you expect a weaker FX rate in the next 3 month. You want to hedge FX risk with a forward: rCZK = 3%; rEUR = 4%. What Profit/Loss will you realize in 3 month? What are the opportunity costs when the FX rate in 3 month turns out to be 20,9 EURCZK?

thx a lot....