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FrameSuite Co., a U.S. multinational corporation, has just ordered materials from a British firm. The transaction...

FrameSuite Co., a U.S. multinational corporation, has just ordered materials from a British firm. The transaction is denominated in British pounds and your firm will need 2,700,000 pounds in 1 year to pay for the purchase. The 1-year forward rate of the British pound is $1.35 while the spot rate is $1.44. The following interest rates exist:

U.S.

Britain
1 year borrowing rate

6%

7%

1 year deposit rate

4%

3%


Given the information above, If you use a money market hedge, the amount of dollars you need in 1 year is:

$3,778,991.

$4,017,155.

$3,924,679.

$3,645,000.

$4,001,243.

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