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_ 26. Consider a US. trader who will receive a shipment of raw materials om a Mexican supplier. However, he expects the dollar to depreciate
_ 26. Consider a US. trader who will receive a shipment of raw materials om a Mexican supplier. However, he expects the dollar to depreciate by the time the shipment reaches him. If the current spot exchange rate is $1 = 12.66 Mexican peso, identify the correct statement form the following. a. The trader should use the spot exchange rate prevailing at the time of receiving the shipment of raw materials to make his payments to the Mexican suppliers. b. The trader is likely to benet if he enters into a forward contract. 0. The Mexican supplier is likely to benet if he enters into a forward contract. (1. The US. trader will earn a forward premium by entering into a forward contract, if his expectations about the dollar's value are realized. e. The Mexican trader will earn a forward discount by entering into a forward contract, if expectations about the dollar's value are realized
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