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What the probability that the forward hedge will result

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Question 1: Assume that Kramer Co. will receive SF800,000 in 90 days. Today's spot rate of the Swiss franc is $.62, and the 90-day forward rate is $.635. Kramer has developed the following probability distribution for the spot rate in 90 days. The possible spot rate is $.61, $.63, $.64, and $.65 with the probability 10%, 20%, 40%, and 30%. The probability that the forward hedge will result in more dollars received than not hedging is? (Please round up to 2 decimals)

Reference no: EM132873412

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