An importer in UK has a payable of Euro 500,000 after three months.He has collected the following information from his banker Euro/$ Spot: 1.4200/1.4210 3 months forward: 1.4245/1.4256 3 months interest rates (p.a) Euro: 2.60% - 2.80% Pound: 3.00% - 3.20%.

Which would you recommend for covering exposure through?

Answer rating: 100% (QA)

To determine the best option for covering the importers exposure we need to compare the costs of usi... View the full answer