Holden Ltd is scheduled to make a payment of 2,000,000 in 90 days to Renault...
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Holden Ltd is scheduled to make a payment of 2,000,000 in 90 days to Renault in connection with a shipment of the engine component that Holden is purchasing from Renault. Suppose that the current exchange rate is 0.58/$, that analysts are forecasting that the dollar will appreciate by 3% over the next 90 days, and that the standard deviation of 90-day forecasts of the percentage rate of appreciation of the dollar relative to the euro is 8%. If Holden does not hedge its transaction exchange risk, what is the highest value from the range of possible dollar costs that incorporates 68.26% of the possibilities?
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