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Assume a U.S. company purchases equipment from a German supplier for 37,500 when the exchange rate at the time of the transaction is $1.5 per
Assume a U.S. company purchases equipment from a German supplier for 37,500 when the exchange rate at the time of the transaction is $1.5 per euro, or 0.667 per dollar. The U.S. company doesn't have to pay the German supplier until the end of the month. If the forward rate is $1.49 per dollar or 0.671 per dollar, how much is the hedged exposure of the US company.
A) $25,167 B) $25,000 C) $56,250 D) $55,887
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