Suppose a U . S . company has a 5 million receivable denominated in Euro that it

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Question:

Suppose a U

.

.

company has a

5

million receivable denominated in Euro that it expects to collect in

90

days. Fearing a weakening of the EURO, the company hedges this risk in the forward market with JPM Chase as the counterparty. The

3 -

month USD

/

EURO forward rate is $

1.2052 .

The USD

/

EURO spot rate is $

1.1367

at settlement. What would be the net cash received in USD from these transactions?

Posted Date: May 11, 2024 05:21 AM

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Suppose a U . S . company has a 5 million receivable denominated in Euro that it

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