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dear tutor
when calculate premium charge, why use 0.8711€/$ but not 0.8707?
thanks
The premium is charged in $’s. Therefore they have to buy $’s in order to pay the premium. 0.8711 is the rate when buying $’s. (It cannot be 0.8707 anyway because that would mean paying fewer Euros – it is the bank that benefits from the spread not the company, so it is always the rate that is worst for the company 🙂 )
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