Determine the amount of u.s dollars needed in 1 year

Reference no: EM13256492

Montclair Co., a U.S. firm, plans to use a forward hedge to hedge its payment of 3 million Australian dollars for Australian goods in one year. The U.S. interest rate is 7 percent, while the Australian rate is 12 percent. The spot rate of the Australian dollar is $.85, while the 1-year forward rate is $.81. Determine the amount of U.S dollars needed in 1 year if a forward hedge is used.

Reference no: EM13256492

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