Homework Answers
Answer
If the transaction was not hedged than we will take the spot rate of Delivery date i.e. C$0.99
Cost of Equipment = $250,000 * 0.99
= $247,500
Answer = $247,500
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On August 1, 2019, when the spot rate was US$1 - C$102, Avery Corporation of Winnipeg,...
On August 1, 2019, when the spot rate was US$1 - C$102, Avery Corporation of Winnipeg,...
On August 1, 2019, when the spot rate was US$1 - C$102, Avery Corporation of Winnipeg, Manitoba, ordered equipment from an American supplier for US$250,000. Delivery was scheduled for the month of September, with payment in full on delivery Upon placing the order, Avery immediately entered into a forward contract with its bank to purchase US$250,000 on September 15, 2019 at the forward rate of US$ = C$1.01 The equipment was received on September 15, 2019, when the spot rate...
On May 1, 2019, Avery Corporation purchased merchandise from a Danish firm for 198,000 Danish krone...
On May 1, 2019, Avery Corporation purchased merchandise from a Danish firm for 198,000 Danish krone when the spot rate for krone was 5200 krone per dollar. The account payable was denominated in krone. Avery settled the account on September 1 when the spot rate for krone was 5,345 krone per dollar. How much cash will Avery have to disburse to settle the account? Multiple Choice O $1,029,600. O $38,077 O 537044 S1058.310
The following table shows the US$/C$ spot rate and forward rates as of January 11, 2019....
The following table shows the US$/C$ spot rate and forward rates
as of January 11, 2019.
(a)
Covert the above exchange rates into the direct quotes.
(b)
Does the forward rate structure imply that the Canadian dollar
will depreciate or appreciate against the US dollar over the
next
year?
c)What is the implied annual rate of appreciation/depreciation
of the Canadian dollar against the US dollar over the next
three months, over the next six months, and over the next
year?...
On August 1, 2019, when the spot rate was US$1 - C$102, Avery Corporation of Winnipeg, Manitoba, ordered equipment from an American supplier for US$250,000. Delivery was scheduled for the month of September, with payment in full on delivery Upon placing the order, Avery immediately entered into a forward contract with its bank to purchase US$250,000 on September 15, 2019 at the forward rate of US$ = C$1.01 The equipment was received on September 15, 2019, when the spot rate...
On May 1, 2019, Avery Corporation purchased merchandise from a Danish firm for 198,000 Danish krone when the spot rate for krone was 5200 krone per dollar. The account payable was denominated in krone. Avery settled the account on September 1 when the spot rate for krone was 5,345 krone per dollar. How much cash will Avery have to disburse to settle the account? Multiple Choice O $1,029,600. O $38,077 O 537044 S1058.310
The following table shows the US$/C$ spot rate and forward rates
as of January 11, 2019.
(a)
Covert the above exchange rates into the direct quotes.
(b)
Does the forward rate structure imply that the Canadian dollar
will depreciate or appreciate against the US dollar over the
next
year?
c)What is the implied annual rate of appreciation/depreciation
of the Canadian dollar against the US dollar over the next
three months, over the next six months, and over the next
year?...
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