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a K-Roo Ltd., an Australian firm, has a USD 264 million payable in one year that it wants to hedge, and enters into a risk

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a K-Roo Ltd., an Australian firm, has a USD 264 million payable in one year that it wants to hedge, and enters into a risk sharing arrangement with its supplier, Ala Co. The terms of the risk sharing contract are the following: Base rate: AUD1.13/USD Neutral zone: AUD 1.017/USD to AUD1.243/USD. K-Roo and Ala Co. agree to split the exchange rate risk equally. If the spot exchange rate in one year is AUD1.4125/USD, how much must K-Roo pay? O a. 320.6940 million b. 336.7287 million O c. 288.6246 million Od 22.3740 million e. 372.9000 million

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