Jerber electronics inc. sold electrical equipment to a dutch company for 68,000 guilders (g) on may 14, with collection due in 60 days. on the same day, jerber entered into a 60-day forward contract to sell 68,000 guilders at a forward rate of g1 = $0.557. the forward contract is not designated as a hedge. jerber's fiscal year ends on june 30. the forward rate on june 30 for an exchange on july 13 is g1 = $0.524. the spot rates follow:

Financial markets and channel to . they also channel money from individuals who want to for the future to those who need cash to spend today. a third function of financial markets is to allow individuals and businesses to adjust their risk. for example, , such as the vanguard index fund, and , such as spdr's or “spiders,” allow individuals to spread their risk across a large number of stocks. financial markets provide other mechanisms for sharing risks. for example, a wheat farmer and a baker may use the to reduce their exposure to wheat prices. financial markets and intermediaries allow investors to turn an investment into cash when needed. for example, the of public companies are because they are traded in huge volumes on the . are the main providers of payment services by offering checking accounts and electronic transfers. finally, financial markets provide information. for example, the of a company that is contemplating an issue of debt can look at the yields on existing to gauge how much interest the company will need to pay.