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Suppose that A company wishes to use a money market hedge to protect a COP 3.75billion payable due in two year's time. The US interest
Suppose that A company wishes to use a money market hedge to protect a COP 3.75billion payable due in two year's time. The US interest rate is currently 8.2% per annum ( compounded annually) and the Colombian interest rate is 14.5% per annum (compounded annually).
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To determine how much better or worse off A company is as a result of performing the money market hedge we need to compare the cost of hedging to the ...
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Fundamentals of Futures and Options Markets
Authors: John C. Hull
8th edition
978-1292155036, 1292155035, 132993341, 978-0132993340
