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A US bank, issues $44.50 million in 1-year CDs at a yield of 3.78% and lends those fundsout in the EU for 1 year at
A US bank, issues $44.50 million in 1-year CDs at a yield of 3.78% and lends those fundsout in the EU for 1 year at an interest rate of 5.23%. The current spot rate is 1.16 $/ and the 1-year forward rate is 1.054 $. How many euros do they need to sell in their foreard contract to eliminate their exchange rate risk? Answer in millions of euros
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The Routledge Handbook Of State Owned Enterprises
Authors: Luc Bernier, Massimo Florio, Philippe Bance
1st Edition
1138487694, 978-1138487697
