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Styles Question 3 (4 Marks) On January 10, Volkswagen agrees to import auto parts worth $7 million from the U.S. The parts will be delivered

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Styles Question 3 (4 Marks) On January 10, Volkswagen agrees to import auto parts worth $7 million from the U.S. The parts will be delivered on March 4 and are payable immediately in dollars. VW decides to hedge its dollar position by entering into futures contracts The spot rate is S1.3447/ and the March 4th futures price is S1.3502. Calculate the number of futures contracts that VW needs. (Assume a futures contract size of 125,000)

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