Exposure using forward contracts

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Reference no: EM131916325

Suppose that the Irish construction company Sisk Group orders 10 trucks from the US company Caterpillar for delivery in 9 months time at a cost of $2,000,000. Show how Sisk Group can hedge this FX exposure using forward contracts. The current EURUSD spot price is 0.94 (1 USD = 0.94 EUR) and the forward price is 0.88.

Reference no: EM131916325

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