A bank has committed to deliver yen in six 6 months to a


Question: A bank has committed to deliver yen in six (6) months to a corporate customer. The spot rate is 110 yen to the dollar and the 6 month forward rate is 105 yen per dollar. Are there costs to hedging this exposure with the forward market? Explain.

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Finance Basics: A bank has committed to deliver yen in six 6 months to a
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