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Suppose that Retrojo Inc. is a U . S . based MNC that will need to purchase F$ 1 . 8 0 million ( Fijian
Suppose that Retrojo Inc. is a US based MNC that will need to purchase F$ million Fijian dollars, F$ worth of imports from Fiji in days. Currently, the spot rate for the Fijian dollar is $ per F$
Suppose that Retrojo negotiates a forward contract with a bank, which commits it to purchasing Fijian dollars at F$ at $ per Fijian dollar in days. Thus, Retrojo knows with certainty that it will need F$times $ per Fijian dollars$ for this exchange.
If the Fijian dollar depreciates over this time period, to $ per Fijian dollar, then only US dollars would be needed to exchange for the required F$
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