Spot exchange Rate
Nok 6.0312/$
3-month forward rate
Nok 6.0186/$
U.S. dollar 3-month interest rate
5%
Norwegian Krone 3-month interest rate
4.45%
Based on the above information, what hedging strategy should Ari advise the CFO that works the best for Statoil? Explain why Ari should choose such hedging strategy. How much U.S. dollar will Statoil receive at the end of 3 months by using this hedging strategy?
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