15. Currency hedging (S28.3) A U.S. company has committed to pay 10 million kronor to a Swedish...

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15. Currency hedging (S28.3) A U.S. company has committed to pay 10 million kronor to a Swedish company in one year. What is the cost (in present value) of covering this liability by buying kronor forward? The Swedish interest rate is 0.02%, and exchange rates are shown in Table 28.1. Briefly explain.

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Principles Of Corporate Finance

ISBN: 9781264080946

14th Edition

Authors: Richard Brealey, Stewart Myers, Franklin Allen, Alex Edmans

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