Question
Your small multinational US business has a 10,000 Euro consulting fees to pay a consultant based in Portugal in 6 months. The 6 month EUR
Your small multinational US business has a 10,000 Euro consulting fees to pay a consultant based in Portugal in 6 months. The 6 month EUR forward rate is 1.25. You hedge 100% of the exposure using a forward contract. If the actual exchange rate in 6 months is 1.34, then what is the US dollar gain or loss on your hedged exposure?
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International Finance Discussion Papers Predictable Uncertainty In Economic Forecasting
Authors: United States Federal Reserve Board , Neil R. Ericsson
1st Edition
1288731493, 9781288731497
