Your firm is a U.K.-based exporter of British bicycles. You have sold an order to an Italian
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Your firm is a U.K.-based exporter of British bicycles. You have sold an order to an Italian firm for €1,000,000 worth of bicycles. Payment from the Italian firm (in €) is due in twelve months. Your firm wants to hedge the receivable into pounds. Not dollars.
Interest rates are 3% in €, 2% in $ and 4% in £.
Detail a strategy using spot exchange rates and borrowing or lending that will hedge your exchange rate risk.
Related Book For
International Business Law And Its Environment
ISBN: 9781305972599
10th Edition
Authors: Richard Schaffer, Filiberto Agusti, Lucien J. Dhooge
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