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Global Distributors Inc. plans to make a payment of 1 , 5 0 0 , 0 0 0 to a supplier in Europe in 3
Global Distributors Inc. plans to make a payment of to a supplier in Europe in months. To protect against currency fluctuation, the company is considering entering into a forward rate agreement. The current EURUSD spot exchange rate is and the threemonth forward rate offered by the bank is If the spot rate at the time of transaction becomes how much USD will Global Distributors save by entering into the forward rate agreement?
A $
B $
C $
D None, it incurs a loss
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