An American firm owes 5,400,000.00 payable in one year. The current spot is $1.1667 /...
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An American firm owes 5,400,000.00 payable in one year. The current spot is $1.1667 / . A European bank is paying 4.50% on deposits or will lend at 7.00%. A U.S. bank is paying 3.00% or will lend at 5.00%. The firm will hedge this exposure with money market hedging. What will be their total cost in one year?
A.$6,330,324.40
B.None of the alternatives
C.$6,028,880.38
D.$5,167,464.11
E.$6,209,746.79
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