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A US corporation wants to hedge a 70,000 pound payable (i.e. a 70,000 purchase).. The futures price is $0.50. If the spot rate at the

A US corporation wants to hedge a 70,000 pound payable (i.e. a 70,000 purchase).. The futures price is $0.50. If the spot rate at the time of maturity is $0.65,

(a) what action should be taken by the corporation?

(b) what is the total gain or loss on the position?

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