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DKNY owes Euro 170 million in 60 days for a recent shipment of Spanish textiles. It faces the following exchange rates: Spot rate: Euro 0.89/$

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DKNY owes Euro 170 million in 60 days for a recent shipment of Spanish textiles. It faces the following exchange rates: Spot rate: Euro 0.89/$ Forward rate (30 days) Euro 0.91/$ Forward rate (60 days) Euro 0.93/$ DKNY can avoid its transaction exposure altogether if the Spanish textile exporter allows it to pay the sale in dollars. Suppose the Spanish exporter, an informed customer, is willing to receive payments in dollars, what dollar value should it charge? Is it possible for DKNY to gain from risk shifting

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