2. A U.S. firm has a receivable of 1,550,000 in one year. Forward rate quotes are $1.2175/ bid and $1.2200/ ask. If the U.S. firm hedges with a forward, what is the guaranteed inflow in USD from the receivable?

3. A European borrower borrows $5,000,000 from an American bank for one year. The interest rate is 5%. The exchange rate at the start of the year is $1.252/ and is $1.268/ at the end of the year. What is the European borrowers EUR-denominated equivalent cost of borrowing? Please answer in PERCENT form. Hint: This is similar to computing a $-denominated equivalent cost of borrowing for a U.S. firm