A U.S. company has committed to pay 10 million kronor to a Swedish company in one year.
Question:
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 .6%, and exchange rates are shown in Table 27.1. Briefly explain.
Table 27.1
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Zero Buying kronor in ...View the full answer
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Related Book For 
Principles of Corporate Finance
ISBN: 978-1260013900
13th edition
Authors: Richard Brealey, Stewart Myers, Franklin Allen
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