Question
Langford Inc. expects to pay Singapore $2,125,000 in one year on a loan. The existing spot rate of the Singapore dollar is $0.58. The one-year
Langford Inc. expects to pay Singapore $2,125,000 in one year on a loan. The existing spot rate of the Singapore dollar is $0.58. The one-year forward rate of the Singapore dollar is $0.62. Langford created a probability distribution for the future spot rate in one year as follows:
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