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A U.S. FI is planning to hedge its one-year 100 million Chinese yuan (CNY) denominated liability against exchange risk. The current spot rate is

A U.S. FI is planning to hedge its one-year 100 million Chinese yuan (CNY) denominated liability against exchange risk. The current spot rate is $0.15/. The FI should be worried about in yuan and therefore yuan via forward contracts to hedge against the exchange rate risk exposure.

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