Forward transactions and hedging

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Forward transactions and hedging-The three-month interest rate is 3% for the dollar and is 5% for the British pound. The current spot rate is $1.5556/xi. A dealer sells xi 20,000,000 forward for dollars for delivery in three months at $1.5479/xi.. Analyze risk that the dealer is facing and provide a possible solution to hedge such risk.

Reference no: EM131043496

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