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Assume that Parker Co. will receive SF200,000 in 360 days. The 360-day borrowing and deposit rate in the U.S. is 7% and 6%, respectively. The
Assume that Parker Co. will receive SF200,000 in 360 days. The 360-day borrowing and deposit rate in the U.S. is 7% and 6%, respectively. The 360-day borrowing and deposit rate in Switzerland is 5% and 4%, respectively. Assume the forward rate of the Swiss franc is $.50 and the spot rate of the Swiss franc is $.48. If Parker Co. uses a money market hedge, how many dollars will it receive in 360 days?
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