10.8 Caribou River Caribou River, Ltd., a Canadian manufacturer of raincoats, does not selectively hedge its transaction exposure. Instead, if the date of the transaction is known with certainty, all foreign currency-denominated cash flows must utilize the following mandatory forward contract cover formula given in the exhibit 10.8 Given the spot and forward rates shown in your text book, calculate Caribou River's Mandatory Forward Cover A/R due in 3 months, Dkr. (Note: Caribou River is expecting to PAY THE POINTS FORWARD). Using the forward rate, you can then calculate the Expected Canadian dollar value of Dkr sold forward for each of the maturity dates. Expected Canadian dollar value of Dkr sold forward, in whole dollars for: 0-90 days: Ans: C$ 91-180 days: Ans: C$ >180 days: Ans: C$ puncy II War Mandatory Forward Cover 0-90 days 91-180 days 180 days 4.70 4.71 4.72 Spot rate, Dkr/C$ 3-month forward rate, Dkr/C$ 6-month forward rate, Dkr/C$ 12-month forward rate, Dkr/C$ 4.74 75% 60% 50% Paying the points forward Receiving the points forward 1 00% 90% 50%