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Suppose that the future spot exchange rate (CAD/GBP) is expected to be 2.42 and the six-month forward rate (CAD/GBP) is 2.46. Discuss whether ex post

  1. Suppose that the future spot exchange rate (CAD/GBP) is expected to be 2.42 and the six-month forward rate (CAD/GBP) is 2.46. Discuss whether ex post the hedged position is preferable to an unhedged position if a UK-based company had (i) a receivable; and (ii) a payable both denominated in CAD.

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