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Hi,
Part a, demonstrating the outcome of 3 hedging choices.
The question asks how the additional cost of borrowing can be reduced.
I went completely the wrong way with this and calculated the effective rate for each of the 3 hedging methods under the current rate and in the event of an increase of 0.8%.
The solution presents the actual net dollar cost of each method.
Have I robbed myself of 15mrks?
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