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? 15 Nouf plans to visit London in six months to visit a friend. Nouf expects to incur the total cost of pound 10,000 for
? 15 Nouf plans to visit London in six months to visit a friend. Nouf expects to incur the total cost of pound 10,000 for meals and transportation during your stay. As of today, the spot exchange rate is $160/ and the six-month forward rate is $163/. You can buy the Six-month call option on with the exercise rate of $164/E for the premium of $0.10 per . Assume that your expected future spot exchange rate is the same as the forward rate. The Six-month interest rate is 8 percent per annum in the United States and 6 percent per annum in UK. Calculate the future dollar cost of meeting this obligation if you decide to hedge using a forward contract, 8 2:23 Multiple Choice 14300 15000 O a 15300 20000
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