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Assume Centene Inc. will receive 15 million Fijian dollar in 18 months. It does not have a relationship with a bank at this time, and

image text in transcribed Assume Centene Inc. will receive 15 million Fijian dollar in 18 months. It does not have a relationship with a bank at this time, and therefore cannot obtain a forward contract to hedge its receivable at this time. However, in 6 months, it will be able to obtain a one-year (12-month) forward contract to hedge its receivable. Today the 6month U.S. interest rate (not annualized) is 6%, the 12 -month U.S. interest rate 8%, the 6-month Fiji interest rate is 9%, and the 12-month Fiji interest rate is 11%. Assume that both interest rate parity and international fisher effect exist. Assume that the existing interest rates are expected to remain constant over time. The spot rate of the Fijian dollar today is $0.44. Based on this information, estimate the amount of dollars that Centene Inc. will receive in 18 months if Centene Inc. obtains a one-year forward contract to hedge its receivables six months later. $6,421,621.62. $6,244,879.74. $6,783,333.33. $6,975,314.47

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