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Use the following information to answer Q5, Q6 and Q7. You are the CFO at a U.S. exporter. It is now June and in December

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Use the following information to answer Q5, Q6 and Q7. You are the CFO at a U.S. exporter. It is now June and in December you will receive EUR750,000 from your European customer which you must immediately convert into USD. The spot EUR/USD exchange rate is 1.4524. You would like to hedge your exchange rate risk using the Chicago Mercantile Exchange December EUR/USD futures contract. The notional amount for the futures contract is EUR125,000. The interest rate in the U.S. is 4.5% and the interest rate in the Euro area is 2.25%. There are 183 days from now until the December futures contract expires and a 360 day-count is used to represent one year. Q5 Calculate the December EUR/USD futures price. 4 points Your

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