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In december 2002, banks were offering one-year currency forward contracts with a forward exchange rate of $0.987/EUR. Suppose at that time, Manizini placed the order
- In december 2002, banks were offering one-year currency forward contracts with a forward exchange rate of $0.987/EUR. Suppose at that time, Manizini placed the order with Campagnolo with a price of 500 000 EUR and simultaneously entered into a forward contract to purchase 500 000 EUR at a forward exchange rate of 0.987/EUR in December 2003. What payment would Manzini be required to make in December 2003? Assume that the exchange rate rose to $1.22/EUR in December 2003.
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Analysis for Financial Management
Authors: Robert c. Higgins
8th edition
73041807, 73041803, 978-0073041803
