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Assume the following information: U.S. deposit rate for 1 year U.S. borrowing rate for 1 year New Zealand deposit rate for 1 year New Zealand
Assume the following information: U.S. deposit rate for 1 year U.S. borrowing rate for 1 year New Zealand deposit rate for 1 year New Zealand borrowing rate for 1 year New Zealand dollar forward rate for 1 year New Zealand dollar spot rate =10%=11%=7%=9%=$.41=$.39 Also assume that a U.S. exporter denominates its New Zealand exports in NZ$ and expects to receive NZ\$600,000 in 1 year. You are a consultant for this firm. Using the information above, what will be the approximate value of these exports in 1 year in U.S. dollars given that the firm executes a money market hedge
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