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How much would Blossom save by hedging

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Reference no: EM132977526

Question - Blossom Industries has purchased equipment from a Brazilian firm for a total cost of 270,000 Brazilian reals. The firm has to pay in 30 days. Citibank has given the firm a 30-day forward quote of $0.3102/real. Assume that on the day the payment is due, the spot rate is $0.3416/real. How much would Blossom save by hedging with a forward contract?

Reference no: EM132977526

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