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ABC Corporation, a U.S. company, sold equipment to a French company for Euro 100 million. Payment is due in 90 days. Answer the following questions
ABC Corporation, a U.S. company, sold equipment to a French company for Euro 100 million. Payment is due in 90 days. Answer the following questions (24-26) using the information below: Current spot rate $.95/E 90 day Forward rate 5.98/E Interest rate in U.S 696 P.A. Interest rate in France 896 P.A. Call option Strike price $.977E Premium 396 Put option Strike price 5.97/E Premium 496 if a firm uses a money market hedge, how much money should the firm get in 3 months? Less than 590 million Between $90 million and $94 million Between 594 million and $95 million Over $95 million
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