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Given the forecast of the A$ along with the forward rate of the A$, what is the expected increase or decrease in US$ cash flows
Given the forecast of the A$ along with the forward rate of the A$, what is the expected increase or decrease in US$ cash flows which would result from hedging the net cash flows in Canadian dollars? Would you hedge the C$ position?
Currency | Total Inflow | Total Outflow | Total Inflow in USD | Total Outflow in USD | Net Foreign Exchange Exposure in USD |
Australia Dollars (A$) | 33,000,000 | $ 3,000,000 | $ 30,030,000 | $ 2,730,000 | $ 27,300,000 |
Canada Dollars (C$) | 6,000,000 | $ 2,000,000 | $ 3,660,000 | $ 1,220,000 | $ 2,440,000 |
Argentina Pesos (AP) | 12,000,000 | $ 11,000,000 | $ 2,280,000 | $ 2,090,000 | $ 190,000 |
Taiwan Dollars (T$) | 5,000,000 | $ 9,000,000 | $ 3,300,000 | $ 5,940,000 | $ (2,640,000) |
Currency | Spot Rate | One-Year Forward Rate |
A$ | $ 0.91 | $ 0.94 |
C$ | $ 0.61 | $ 0.60 |
AP | $ 0.19 | $ 0.16 |
T$ | $ 0.66 | $ 0.65 |
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