Question: Baxter Inc. expects to pay 1,000,000 90 days from now. It decides to hedge its position by purchasing British pounds forward. The current spot rate

Baxter Inc. expects to pay 1,000,000 90 days from now. It decides to hedge its position by purchasing British pounds forward. The current spot rate of the pound is $1.65, whereas the forward rate is $1.60 and near futures contract rate is $1.63. Baxter Inc. expects the spot rate in 90 days to be $1.62. How many dollars will it pay for the 1,000,000 90 days from now?

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