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Compare the total dollars received

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You work for a U.S.-based company that sold some equipment to Malaysia for 50,000,000 ringgit (MYR) and expects to receive payment in 180 days. You forecast that the MYR/USD spot rate in 180 days will be one of three values: Future Spot Rate Probability $0.23 20% $0.24 50% $0.25 30% Assume that 180-day forward rate on the MYR is $0.245USD. Compare the total dollars (i.e., USD) received if the firm hedges this receivable with a forward contract versus the expected USD to be received if the firm does not hedge this receivable.

Reference no: EM133076231

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