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<ol><li>In december 2002, banks were offering one-year currency forward contracts with a forward

exchange rate of $0.987/EUR. Suppose at that time, Manizini placed the order with Campagnolo with a price of 500 000 EUR and simultaneously entered into a forward contract to purchase 500 000 EUR at a forward exchange rate of 0.987/EUR in December 2003. What payment would Manzini be required to make in December 2003? Assume that the exchange rate rose to $1.22/EUR in December 2003.</li></ol>

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