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Suppose GE will receive 25 million Brazilian real in 25 days from now. To hedge the FX exposure, GE entered into a 25 day forward
Suppose GE will receive 25 million Brazilian real in 25 days from now. To hedge the FX exposure, GE entered into a 25 day forward contract with PNC Bank.
Using a numerical example, explain the opportunity cost associated with using a forward contract to hedge its FX exposure. You need to create (come up with) your own numerical example to answer the question.
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