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You are US company, 300,000 BP (British Pound) payable to UK in one year. Answer in...

You are US company, 300,000 BP (British Pound) payable to UK in one year. Answer in terms of US$.

Information for Forward Contract:

Forward exchange rate (one yr): 1.52 $/BP

Information for Money Market Instruments (MMI):

Current exchange rate: 1.52 $/BP

Investment return at Aerion Fund Management (in UK): 5% annual

Interest rate of borrowing from Bank of America (in USA): 2% annual

Information you need for Currency Options Contract:

Options premium: 0.015 $/BP

Interest rate of borrowing from Bank of America (USA): 2% annual

Allowed to exercise options at 1.54 $/BP

What are the costs of MMI? (Answer in US$ of course. You are US company!)

Group of answer choices

about $462,423

about $423,464

about $437,383

about $442,971

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Answer #1


of Costs MMi वणीप्वं Spot salt L52 4/ep B.P 3,00.000 17 5% us int sat UK int sali out flow as instument masut maney pes 1-02

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