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What is the lower limit for trading at the base rate

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Reference no: EM133000245

Tunisian Firm X imports equipment from German Firm Z. With the volatility of the Tunisian dinar against the Euro, Firm X and Firm Z agree to a risk-sharing arrangement. First, they set the current spot rate of 3.26DT/€ as the base rate. If the spot rate stays within 4% (up or down) of the base rate, then the base rate is used to compute payment. If the spot rate is outside of the 4% range, then Firms X and Z will evenly split the difference between the spot rate and the base rate. The agreement is for the next year.
A) What is the lower limit for trading at the base rate? (No currency label is necessary, answer in DT/€, lower value first (A), higher value second (B), and to four decimal places)

Reference no: EM133000245

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