A Brazilian firm owes you $2 000 000, payable in three months, however, they insist on paying in Brazilian Reals. The current spot exchange rate is $0.59305/Real. The three-month forward exchange rate is $0.61255/Real. How many Real should you demand in a forward contract to receive $2 000 000 in three months to hedge the exchange rate risk?
A) 3 265 040 Real
B) 3 372 397 Real
C) 1 225 100 Real
D) 1 186 100 Real
Correct Answer:
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