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Business, 05.08.2020 04:01 xlxJazmin

Use the following information to calculate the dollar cost of using a money market hedge to hedge 200,000 British pounds of payables due in 180 days. Assume the firm has no excess cash. Assume the spot rate of the pound is $2.02, and the 180-day forward rate is $2.00. The British interest rate is 5 percent, and the U. S. interest rate is 4 percent over the 180-day period.

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