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On February 10, Audi decided to import auto parts worth $7 million from the United States. The parts will be delivered on April 4 and
On February 10, Audi decided to import auto parts worth $7 million from the United States. The parts will be delivered on April 4 and are payable immediately in dollars. Audi decides to hedge its dollar position by entering into futures contracts. The spot rate is $0.8947/ and the April futures price is $0.9002/. Determine and explain the number of futures contracts that Audi must buy to offset its dollar exchange risk on the parts contract.
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