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QUESTION 17 5 Assume that Alpha Co. will receive CD750,000 in 90 days. Today's spot rate of the Canadian Dollar is $.62, and the 90-day

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QUESTION 17 5 Assume that Alpha Co. will receive CD750,000 in 90 days. Today's spot rate of the Canadian Dollar is $.62, and the 90-day forward rate is $.635. Alpha has developed the following probability distribution for the spot rate in 90 days: Possible Spot Rate in 90 Days Probability 5.61 10% $.63 20% $.64 40% 9.65 30% The probability that the forward hedge will result in more dollars received than not hedging 15: 10% 20% 30% 50% 70%

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