What is the cost of implementing the hedge

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Reference no: EM133334554

Question: ARTHUR INC. needs €2,000,000 in 30 days. It can earn 5 percent annualized on a German security. The current spot rate for the euro is $1.00. ARTHUR can borrow funds in the U.S. at an annualized interest rate of 6 percent. If ARTHUR uses a money market hedge to hedge the payable, what is the cost of implementing the hedge? Show all steps.

Reference no: EM133334554

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