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Sir just wanted to make things clear abt the rate used.why r the rate used for premium payable 1.3585,can .And for converting the amount not hedged we r using 1.3623 is
The premium is payable immediately and so we use the current spot rate for having to buy $, which is 1.3585.
If we want to cover the risk of the amount not hedged, then we use the current forward rate. Since the transaction is receiving $’s we use the forward rate for having to sell $’s.
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