Question: Compaq Computer has a 1 million pound receivable that its expects to collect in one year. Suppose the interest rate on th pound is 2.0%

Compaq Computer has a 1 million pound receivable that its expects to collect in one year. Suppose the interest rate on th pound is 2.0% and the interest rate on the U.S dollar is 4%. If the current exchange rate is $1.50/pound, what value could compaq lock on this receivable using a money market hedge? Explain

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