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FrameSuite Co., a U.S. multinational corporation, has justordered materials from a British firm. The transaction isdenominated in British pounds and your firm will need 2,700,000pounds in 1 year to pay for the purchase. The 1-year forward rateof the British pound is $1.35 while the spot rate is $1.44. Thefollowing interest rates exist:U.S.Britain1 year borrowing rate6%7%1 year deposit rate4%3%Given the information above, If you use a money market hedge, theamount of dollars you need in 1 year is:$3,778,991.$4,017,155.$3,924,679.$3,645,000.$4,001,243.
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