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Blake Inc. needs 2,000,000 in 30 days. It can earn 5 percent annualized on a German security. The current spot rate for the euro is
Blake Inc. needs 2,000,000 in 30 days. It can earn 5 percent annualized on a German security. The current spot rate for the euro is $1.00. Blake can borrow funds in the U.S. at an annualized interest rate of 6 percent. If Blake uses a money market hedge to hedge the payable, what is the cost of implementing the hedge?
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