πŸ“Š International Financial Management
Q. Assume zero transaction costs. If the 90-day forward rate of the euro is an accurate estimate of the spot rate 90 days from now, then the real cost of hedging payables will be:
  • (A) positive.
  • (B) negative.
  • (C) positive if the forward rate exhibits a premium, and negative if the forward rate exhibits a discount.
  • (D) zero.
πŸ’¬ Discuss
βœ… Correct Answer: (D) zero.

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