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Assume that rEUR = 8%, rUSD = 3% and X0USD/EUR = 1.28. You want a long forward position in EUR 210,000 1-Year forward. Your banker
Assume that rEUR = 8%, rUSD = 3% and X0USD/EUR = 1.28. You want a long forward position in EUR 210,000 1-Year forward. Your banker quotes you the following USD/EUR forward rate: F1USD/EUR = 1.25. Which choice is more favorable, the actual forward contract or set up a synthetic forward position?
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Do not have enough information to answer this question
Actual Forward Position
Both choices are the same
Synthetic Forward Position
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