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Samson Inc. Needs to pay €1,000,000 in one year. The interest rate on the euro is...

Samson Inc. Needs to pay €1,000,000 in one year. The interest rate on the euro is 3% p.a. And on the U.S. dollar is 5% p.a. The current spot rate for the euro is $1.00. If Samson uses a money market hedge, how much will the hedge cost (approximately)? Can someone show the steps?

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Answer #1

Money market hedge cost us = $19,417.48

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