1 Stride Records simultaneously borrows Chilean pesos at 13% and invests in dollars at 10% both for one year. At the time of these transactions, the spot rate for the pesos is $0.095. If the spot rate is $0.087/peso in one year, what is the cost to Stride of this money market hedge? (2) (a) (b) (c) (d) 2.0% 3.8% 1.3% Stride has a gain of approximately 6.3%, not a cost If it borrowed PV 1 peso converted at 0.095 and invested at 10% and convert back to peso

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To calculate the cost of the money market hedge for Stride Records we need to compare the amount rec... View the full answer