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What is the benefit of hedging with futures contract

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Suppose you need to pay V = 50,000 GBP in a year from now. Spot rate of GBP is 1.3. You do not have enough USD to purchase 50,000 GBP right now. Assume the futures premium = 0.03

What is the benefit of hedging with futures contract if the GBP spot rate in a year from now is 1.3?

Reference no: EM132482962

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