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15 October 2020 A US company knows that in 3 months (15 jan 2021) it will have to pay 1 million of euros and wants
15 October 2020
A US company knows that in 3 months (15 jan 2021) it will have to pay 1 million of euros and wants to hedge the forex exchange risk.
It enters in a forward contract to buy in 3 months 1 million of euros at the price of 1,2860 dollars por euro.
15 Jan 2021
The company buy 1 million euros in exchange of 1,2860 million dollars.
What are the possible outcomes?
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