Samesong Inc. needs 1,000,000 euros in 30 days. Samsong can earn 5 per cent annualized on a German security. The current spot rate for the euro is £0.67. Samesong can borrow funds in the UK at an annualized interest rate of 6 percent. If Samsong uses a money market hedge, how much should it borrow in the UK?

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The Answer of Samesong Inc. needs 1,000,000 euros in 30 days. Samsong can earn 5 per cent annualized on a German security. The current spot rate for the euro is £0.67. Samesong can borrow funds in the UK at an annualized interest rate of 6 percent. If Samsong uses a money market hedge, how much should it borrow in the UK?