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You work for Proton Malaysia, the automobile manufacturer, which has begun to sell its cars in Brazil. You wish to hedge your company's foreign exchange
You work for Proton Malaysia, the automobile manufacturer, which has begun to sell its cars in Brazil. You wish to hedge your company's foreign exchange risk on a 3-month forward basis, yet there are no clear forward market MYR/BRL quotes. You collect the following quotes, instead: A. Based upon these quotes, what is the implied mid-market spot price of MYR/BRL? (5 points) B. What is the implied bid/ask 3-month forward quote for MYR/BRL? (10 points) C. What is the size of the bid/ask spread in percentage terms of the 3-month forward quotes you calculated in part B. above? (4 points)
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