Currency Forward - confusing terminology currency, receive, contract, confusion

MeteorShower

One example Schweser gives on currency forwards states: "Gemco expects to receive EUR 50 million three months from now and enters into a cash settlement currency forward to exchange these euros for US dollars at USD 1.23 per Euro...Under the terms of the contract Gemco would receive USD 61.5million."

The calculation is all fine and dandy for me, but my confusion lies in where the question says "Gemco expects to RECEIVE Euros" then "Gemco would receive USD".

Please explain, thank you!!

evolsteevol

yeah, let's screw that rule, freind. we'll percieve the word just the same whether recieve is spelled with "ei" or "ie".

rkapoor

First, Gemco will RECIEVE EUR 50 million from the its customer in europe.

Next, Gemco will convert this EUR 50 million to USD 61.5 million, i.e, Gemco will now RECIEVE USD 61.5 million in exchange of EUR 50 million .

kmf229

"i" before "e" except after "c"......