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now lets look at how we calculate the matter market value of a forward contract so in example 1 a we have Karen B capital that wants to hitch a long exposure to the British pounds by selling 10 million pounds forward against the US dollar using a 9 month forward contract so the bit offer for the dollar to pound spot rate and the nine month fall at points are as follows so we have the beat and the offer so what is the applicable nine month forward rate that Karen should enter into so in this case I want to sell pounds and pounds is my base currency so and when we are selling pounds we have to of course remember we had the end user so every sell at the lower rate when we buy we buy at the higher rate so in this case if Im selling pounds I will have to side the lower rate of course and using the 9-month points on the beach side so the applicable forward rate for dollar to pound here will be equals to one point two eight five six plus eight over 10,000 remember to convert this into a dec