foreign auto purchase | Business & Finance homework help
Firstly, this strategy eliminates any exchange rate risk since the buyer is able to lock in their price when entering into these types of agreements. Furthermore, having already secured their funds beforehand means that they will have access to them instantly upon completion which provides greater convenience over time. Additionally, by taking advantage of these contracts it becomes possible for buyers to realize arbitrage opportunities which can lead to additional profits as well.
Overall, using forward contracts when making large purchases such as cars is beneficial given their flexibility and ability to provide certainty with respect to pricing thus allowing buyers peace of mind moving forward.