Boeing imported a Rolls-Royce jet engine for 5 mil payable in one year (10 points)...
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Boeing imported a Rolls-Royce jet engine for 5 mil payable in one year (10 points) The US interest rate 6.00% per annum The UK interest rate 6.50% per annum The Spot exchange rate $ 1.80/ today How to utilize the money market tools to hedge the risk of pound exchange one year later? In particular, answer which loan (US or UK) to borrow and to lend? How much is the dollar cost one year later (a number you would know today)
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