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Assume that Parker Company will receive SF200,000 in 180 days. Assume the following interest rates: 360-day...
Assume that Parker Co will receive SF250,000 in 360 days. Assume the following interest rates U.S....
Assume that Parker Co will receive SF250,000 in 360 days. Assume the following interest rates U.S. Switzerland 360-day borrowing rate 360-day deposit rate Assume the forward rate of the Swiss franc is $.75 and the spot rate of the Swiss franc is $.68. If Parker Co, uses a money market hedge, it will receive in 360 days. $171619 $101.923 $225,500 $148,904 596,914
Parker Company, a U.S. MNC, will receive AUD200,000 in 360 days. Assume that the 360-day interest...
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.
Instructions: Show all calculations in detail. No partial credit will be given for just 1) Assume...
Instructions: Show all calculations in detail. No partial credit will be given for just 1) Assume the following information: U.S. deposit rate for 1 year U.S. borrowing rate for 1 year New Zealand deposit rate for 1 year - 8% New Zealand borrowing rate for 1 year 10% New Zealand dollar forward rate for 1 year $.40/NZS New Zealand dollar spot rate - $.39/NPS Also assume that a U.S. exporter denominates its New Zealand exports in NZS and expects to...
1. Assume the following information: 180-day U.S. interest rate 180-day British interest rate 180 day forward...
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 $1.48 Assume that a US firm will receive 400,000 pounds in 180 days. Would it be better off using a forward hedee or a money market hedge? Substantiate your answer with estimated revenues for each tune hedge. h. Assume that a US firm will pay 400,000 pounds in 180 days. Would it...
180-day U.S. interest rate 180-day Fijian interest rate 180-day forward rate of Fijian dollar (F$) Spot...
180-day U.S. interest rate 180-day Fijian interest rate 180-day forward rate of Fijian dollar (F$) Spot rate of Fijian dollar Expected spot rate of Fijian dollar in 90 days 49% 596 $0.49 $0.48 $0.47 Assume that Monte Christo Corporation in the U.S. will receive 500,000 Fijian dollars in 180 days. What is value of the receivable if Monte Christo implements a forward hedge? a. $240,000 b. $245,000 c. $235,000 d. None of these choices are correct.
Your company will have to make a payment of A$500,000 in 180 days. The 180-day forward...
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.
Money Market Versus Put Option Hedge. Narto Co. (a U.S. firm) exports to Switzerland and expects...
Money Market Versus Put Option Hedge. Narto Co. (a U.S. firm) exports to Switzerland and expects to receive 500,000 Swiss francs in one year. The one-year U.S. interest rate is 5% when investing funds and 7% when borrowing funds. The one-year Swiss interest rate is 9% when investing funds, and 11% when borrowing funds. The spot rate of the Swiss franc is $.80. Narto expects that the spot rate of the Swiss franc will be $.75 in one year. There...
If annualized nominal interest rates in the US and Switzerland are 12% and 8% respectively and...
If annualized nominal interest rates in the US and Switzerland are 12% and 8% respectively and the 90-day forward [one-year forward] rate for the Swiss franc is $1.0218, at what current spot rate for the Swiss frank will interest rate parity hold?
Assume that Co. will need to purchase 100,000 Singapore dollars (SGD) in 180 days. Today’s spot...
Assume that Co. will need to purchase 100,000 Singapore dollars (SGD) in 180 days. Today’s spot rate of the SGD is $.50, and the 180‑day forward rate is $.53. A call option on SGD exists, with an exercise price of $.52, a premium of $.02, and a 180‑day expiration date. A put option on SGD exists, with an exercise price of $.51, a premium of $.02, and a 180‑day expiration date. Company has developed the following probability distribution for the...
Spot rates for 90-day, 180-day, 270-day, and 360-day loans are 2%, 2.5%, 2.75%, and 3%, respectively....
Spot rates for 90-day, 180-day, 270-day, and 360-day loans are 2%, 2.5%, 2.75%, and 3%, respectively. Given this information, the 90-day forward rate 180 days from now is closest to: Group of answer choices A. 3.21% B. 2.88% C. 3.67%
Assume that Parker Co will receive SF250,000 in 360 days. Assume the following interest rates U.S. Switzerland 360-day borrowing rate 360-day deposit rate Assume the forward rate of the Swiss franc is $.75 and the spot rate of the Swiss franc is $.68. If Parker Co, uses a money market hedge, it will receive in 360 days. $171619 $101.923 $225,500 $148,904 596,914
Instructions: Show all calculations in detail. No partial credit will be given for just 1) Assume the following information: U.S. deposit rate for 1 year U.S. borrowing rate for 1 year New Zealand deposit rate for 1 year - 8% New Zealand borrowing rate for 1 year 10% New Zealand dollar forward rate for 1 year $.40/NZS New Zealand dollar spot rate - $.39/NPS Also assume that a U.S. exporter denominates its New Zealand exports in NZS and expects to...
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 $1.48 Assume that a US firm will receive 400,000 pounds in 180 days. Would it be better off using a forward hedee or a money market hedge? Substantiate your answer with estimated revenues for each tune hedge. h. Assume that a US firm will pay 400,000 pounds in 180 days. Would it...
180-day U.S. interest rate 180-day Fijian interest rate 180-day forward rate of Fijian dollar (F$) Spot rate of Fijian dollar Expected spot rate of Fijian dollar in 90 days 49% 596 $0.49 $0.48 $0.47 Assume that Monte Christo Corporation in the U.S. will receive 500,000 Fijian dollars in 180 days. What is value of the receivable if Monte Christo implements a forward hedge? a. $240,000 b. $245,000 c. $235,000 d. None of these choices are correct.
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