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New York Co. has payables of 10 million Australian dollars (AUD) in 1 year. New York Co. plans to hedge its exposure with a forward
New York Co. has payables of 10 million Australian dollars (AUD) in 1 year. New York Co. plans to hedge its exposure with a forward contract that it will arrange today. Assume Interest Rate Parity (IRP) holds. Following information is available. 1) Calculate the forward exchange rate in American term. 2) Calculate the amount of US dollars that New York Co. will need in 1 year to make its payment
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