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Purchasing british pounds forward

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Baxter Inc. expects to pay £1,000,000 90 days from now. It decides to hedge its position by purchasing British pounds forward. The current spot rate of the pound is $1.65, whereas the forward rate is $1.60 and near futures contract rate is $1.63. Baxter Inc. expects the spot rate in 90 days to be $1.62. How many dollars will it pay for the £1,000,000 90 days from now?

Reference no: EM131152589

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