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Assume IBM enters into a forward contract to purchase 1 0 0 , 0 0 0 euros at a rate of $ 1 . 6

Assume IBM enters into a forward contract to purchase

100, 000

euros at a rate of $

1.60 /

euro one year from today. If the spot exchange rate is $

2 /

euro one year later, what is the dollar amount that IBM must pay to receive the euros?Question

11

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