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A U.S. based importer makes a purchase from a firm in Germany for 315,000. Suppose the firm completes a forward hedge at the 90-day forward
A U.S. based importer makes a purchase from a firm in Germany for 315,000. Suppose the firm completes a forward hedge at the 90-day forward rate of $1.1580/. If the spot rate in 90 days is $1.1750/, how much will the U.S. firm have saved or lost in U.S. Dollars by hedging its exchange rate exposure? Explain your answer very well.
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