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Suppose that Berjaya Sdn bhd a company in Malaysia is using ringgit and Main Limited in Britain transacts in Pound. Berjaya Sdn bhd has to
Suppose that Berjaya Sdn bhd a company in Malaysia is using ringgit and Main Limited in Britain transacts in Pound. Berjaya Sdn bhd has to pay 100,000 to Main limited in 1 year. The exchange rate RM - is volatile and the company wishes to fix its payable and receivable in RM. The annual interest rates are 8% and 10% for RM and respectively. The spot exchange rate is 5 units of RM per 1 unit of . Determine the 360-day forward rate by using hedge using money market:
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