I struggled big time with this chapter. Not the methods, but just any part where math was needed.
A trade enters a short 3-month non-deliverable forward on 2,000,000 CNY at CNY/USD 6.1155. At the end of the period, the spot exchange rate is USD/CNY 0.1612. The trader’s gian or loss is closest to:
USD ________ Gain/Loss.
So he shorts the forward, so he wants CNY to go down in value. Which is does. Can someone please explain how they think through this question. It has helpedm e to always remember to put a (1) next to the denominator currency.