Given 180 day forward rate = $0.49 /F$
The amount receivable = F$500,000
Hence the amount received if implement forward hedge = 500,000×0.49 =$245000
Answer.b. $245000
180-day U.S. interest rate 180-day Fijian interest rate 180-day forward rate of Fijian dollar (F$) Spot...
1. Assume the following information: 180-day U.S. interest rate 180-day British interest rate 180 day forward rate of British pound Spot rate of British pound 8% 9% $1.50 $1.48 Assume that a US firm will receive 400,000 pounds in 180 days. Would it be better off using a forward hedee or a money market hedge? Substantiate your answer with estimated revenues for each tune hedge. h. Assume that a US firm will pay 400,000 pounds in 180 days. Would it...
current spot exchange rate: $0.0100/yen current 180-day forward exchange rate: $0.0105/yen 180-day U.S. interest rate(on dollar denominated assets): 6.05% 180-day Japanese interest rate(on yen denominated assets): 1.00%
Your company will have to make a payment of A$500,000 in 180 days. The 180-day forward rate in the Australian dollar is $0.68. The current spot rate is $0.65. If you use a forward hedge, you will: receive $340,000 today. receive $340,000 in 180 days. pay $340,000 in 180 days. receive $325,000 today. pay $735,294 in 180 days.
Assume the following information: Spot rate of Mexican peso : $.100 180-day forward rate of Mexican peso : $.098 180-day Mexican interest rate : 6% 180-day U.S. interest rate : 5% a) What would be the return to a Mexican investor who has 1,000,000 Mexican pesos from using covered interest arbitrage? (i.e. the Mexican investor will convert the peso into U.S. dollar at the spot rate and invest it in the U.S. for 180 days, and simultaneously sell a U.S....
2. Assume the following information: Spot rate of Mexican peso : $.100 180-day forward rate of Mexican peso : $.098 180-day Mexican interest rate : 6% 180-day U.S. interest rate : 5% a) What would be the return to a Mexican investor who has 1,000,000 Mexican pesos from using covered interest arbitrage? (i.e. the Mexican investor will convert the peso into U.S. dollar at the spot rate and invest it in the U.S. for 180 days, and simultaneously sell a...
The SF/$ spot exchange rate is SF1.26/$ and the 180-day forward exchange rate is SF1.32/$. What is the forward premium or discount? If you are a Switzerland based exporter expecting $500,000 dollar receivables in 6 months, would you hedge your dollar receivables using a forward contract? How?
Assume that Parker Company will receive SF200,000 in 180 days. Assume the following interest rates: 360-day borrowing rate 360-day deposit rate U.S. 7% 6% Switzerland 5% 49 Assume the forward rate of the Swiss franc is 5.50 and the spot rate of the Swiss franc is 5.48. If Parker Company uses a money market hedge, it will receive_in 180 days. 592.307 594,307 $96,914 $98,769 None is correct.
QUESTION 25 Let the U.S. dollar-yen spot rate be ¥120/$. Also, let the 180-day forward exchange rate be ¥124.8/$. Then the yen is selling at a per annum _________ of ___________. a. premium; 8.00% b. premium; 6.30% c. discount; 8.00% d. discount; 1.57% QUESTION 26 Assume that a green card holder flies with American Airlines from NYC to Paris. The related transactions will be reported on the Balance of Payments. True False
Parker Company, a U.S. MNC, will receive AUD200,000 in 360 days. Assume that the 360-day interest rate in the United States is 1% and in Australia 3%. Assume the forward rate of the Australian dollar is USD0.50/AUD and the spot rate of the Australian dollar is USD0.48/AUD. If Parker Company uses a forward hedge, it will receive ____ in 360 days. USD 94,136. USD 93,204. USD 100,000. None of the answers is correct.
spot rate of mexican peso: 0.1 180 day mexican interest rate: 6% 180 day US interest rate: 5% 180 day forward rate of mexican peso: $0.098 a. US investor has $50,000 to invest. find the return from covered interest arbitage for the US investor b. Mexican investor 500,000 Mexican pesos to invest. find the return from covered interest arbitage for the Mexican investor c. realignment of covered interest arbitrage from the presceptive of the mexican investor: