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Suppose that Boeing Corporation exported a Boeing 747 to Lufthansa and billed 10 million payable in one year. The money market interest rates and foreign

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Suppose that Boeing Corporation exported a Boeing 747 to Lufthansa and billed 10 million payable in one year. The money market interest rates and foreign exchange rates are given as follows: The U.S. one-year interest rate: The euro zone one-year interest rate: The spot exchange rate: The one-year forward exchange rate 6.10% per annum 9.00% per annum $ 1.50/ $ 1.46/ Assume that Boeing sells a currency forward contract of 10 million for delivery in one year, in exchange for a predetermined amount of U.S. dollars. Which of the following is/are true? On the raturity date of the contract Boeing will... O have to deliver 10 million to the bank (the counterparty of the forward contract). (it) take delivery of $14.6 million (ili) have a zero net euro exposure (iv) have a profit, or a loss, depending on the future changes in the exchange rate, from this British sale. Select one D.), and (iv) O ) and (tv) O none of these answers O (II) and (iv) O O. (1), and (m)

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