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QUESTION 7 2.5 p You are the CFO of World Platform Int., a U.S. multinational corporation....
1. Assume the following information: U.S. deposit rate for 1 year = 11% U.S. borrowing rate...
1. Assume the following information: U.S. deposit rate for 1 year = 11% U.S. borrowing rate for 1 year = 12% 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 New Zealand dollar spot rate = $.39 Also assume that a U.S. exporter denominates its New Zealand exports in NZ$ and expects to receive NZ$600,000 in 90 days. You are a...
Instructions: Show all calculations in detail. No partial credit will be given for just answers. J. Borrow NZS645,4...
Instructions: Show all calculations in detail. No partial credit will be given for just answers. J. Borrow NZS645,455 1) Assume the following information: (NZ$600,000/1.1) = N2 $545,455 2. convert U.S. deposit rate for 1 year = 11% U.S. borrowing rate for 1 year N2 3545,455(+ $.39 per NZA-212,73 = 12% New Zealand deposit rate for 1 year 3, invest S$212.727 to accomuiate = 8% New Zealand borrowing rate for 1 year = 10% $234,12+($212,727 x 1.11)=5236,127 New Zealand dollar forward...
1. Plains States Manufacturing has just signed a contract to sell agricultural equipment to Boschin, a...
1. Plains States Manufacturing has just signed a contract to sell agricultural equipment to Boschin, a German firm, for €1,250,000. The sale was made in June with payment due six months later in December. Because this is a sizable contract for the firm and because the contract is in Euros rather than dollars, Plains States is considering several hedging alternatives to reduce the exchange rate risk arising from the sale. To help the firm make a hedging decision you have...
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...
QUESTION 1 A U.S. MNC will receive 1 million Indian rupees (INR) in one year. The...
QUESTION 1 A U.S. MNC will receive 1 million Indian rupees (INR) in one year. The current spot rate is INR75 /USD and the one year forward rate is INR320/USD. The annual interest rate is 5 percent in India and 0 percent in the United States. The dollar amount the firm will receive using the forward hedge is USD 75,000,000 USD 13,333 USD 3,125. None of the answers is correct. QUESTION 2 Suppose that Boeing Corporation exported a Boeing 747...
need this case answer Part III Case Analysis (20 Marks) Assume that a Euro Zone MNC...
need this case answer
Part III Case Analysis (20 Marks) Assume that a Euro Zone MNC expects to receive CHF 35 million in one (1) year. The existing spot rate of the CHF is EURO.79 - CHFI. The one (1) year forward rate of the CHF EURO 80 - CHF The MNC has calculated a probability distribution for the future spotle in one (1) year as follows: future spot rate probability EURO.7960 25% EURO.8400 48% EUR0.9300 27% Assume that one...
Vino Veritas Company, a U.S.-based importer of wines and spirits, placed an order with a French...
Vino Veritas Company, a U.S.-based importer of wines and spirits, placed an order with a French supplier for 1,200 cases of wine at a price of 230 euros per case. The total purchase price is 276,000 euros. Relevant exchange rates for the euro are as follows: Date September 15 September 30 October 31 Spot Rate $1.15 1.20 1.25 Forward Rate to October 31 $1.21 1.24 1.25 Call Option Premium for October 31 (strike price $1.15) $ 0.050 0.085 0.100 Vino...
Vino Veritas Company, a U.S.-based importer of wines and spirits, placed an order with a French...
Vino Veritas Company, a U.S.-based importer of wines and spirits, placed an order with a French supplier for 1,200 cases of wine at a price of 230 euros per case. The total purchase price is 276,000 euros. Relevant exchange rates for the euro are as follows: Date Spot Rate Forward Rate to October 31 Call Option Premium for October 31 (strike price $1.15) September 15 $ 1.15 $ 1.21 $ 0.050 September 30 1.20 1.24 0.085 October 31 1.25 1.25...
1 IUDICIT 10 (diyurithmic) Question Help ! Elan Pharmaceuticals. Elan Pharmaceuticals, a U.S.-based multinational p...
1 IUDICIT 10 (diyurithmic) Question Help ! Elan Pharmaceuticals. Elan Pharmaceuticals, a U.S.-based multinational pharmaceutical company, is evaluating an export sale of its cholesterol-reduction drug with a prospective Indonesian distributor. The purchase would be for 1,700 million Indonesian rupiah (Rp), which at the current spot exchange rate of Rp9,490/S, translates into $179,135.93. Although not a big sale by company standards, company policy dictates that sales must be settled for at least a minimum gross margin, in this case, a cash...
Use the following information to answer Q5, Q6 and Q7. You are the CFO at a...
Use the following information to answer Q5, Q6 and Q7. You are the CFO at a U.S. exporter. It is now June and in December you will receive EUR750,000 from your European customer which you must immediately convert into USD. The spot EUR/USD exchange rate is 1.4524. You would like to hedge your exchange rate risk using the Chicago Mercantile Exchange December EUR/USD futures contract. The notional amount for the futures contract is EUR125,000. The interest rate in the U.S....
Instructions: Show all calculations in detail. No partial credit will be given for just answers. J. Borrow NZS645,455 1) Assume the following information: (NZ$600,000/1.1) = N2 $545,455 2. convert U.S. deposit rate for 1 year = 11% U.S. borrowing rate for 1 year N2 3545,455(+ $.39 per NZA-212,73 = 12% New Zealand deposit rate for 1 year 3, invest S$212.727 to accomuiate = 8% New Zealand borrowing rate for 1 year = 10% $234,12+($212,727 x 1.11)=5236,127 New Zealand dollar forward...
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...
QUESTION 1 A U.S. MNC will receive 1 million Indian rupees (INR) in one year. The current spot rate is INR75 /USD and the one year forward rate is INR320/USD. The annual interest rate is 5 percent in India and 0 percent in the United States. The dollar amount the firm will receive using the forward hedge is USD 75,000,000 USD 13,333 USD 3,125. None of the answers is correct. QUESTION 2 Suppose that Boeing Corporation exported a Boeing 747...
need this case answer
Part III Case Analysis (20 Marks) Assume that a Euro Zone MNC expects to receive CHF 35 million in one (1) year. The existing spot rate of the CHF is EURO.79 - CHFI. The one (1) year forward rate of the CHF EURO 80 - CHF The MNC has calculated a probability distribution for the future spotle in one (1) year as follows: future spot rate probability EURO.7960 25% EURO.8400 48% EUR0.9300 27% Assume that one...
Vino Veritas Company, a U.S.-based importer of wines and spirits, placed an order with a French supplier for 1,200 cases of wine at a price of 230 euros per case. The total purchase price is 276,000 euros. Relevant exchange rates for the euro are as follows: Date September 15 September 30 October 31 Spot Rate $1.15 1.20 1.25 Forward Rate to October 31 $1.21 1.24 1.25 Call Option Premium for October 31 (strike price $1.15) $ 0.050 0.085 0.100 Vino...
1 IUDICIT 10 (diyurithmic) Question Help ! Elan Pharmaceuticals. Elan Pharmaceuticals, a U.S.-based multinational pharmaceutical company, is evaluating an export sale of its cholesterol-reduction drug with a prospective Indonesian distributor. The purchase would be for 1,700 million Indonesian rupiah (Rp), which at the current spot exchange rate of Rp9,490/S, translates into $179,135.93. Although not a big sale by company standards, company policy dictates that sales must be settled for at least a minimum gross margin, in this case, a cash...
Use the following information to answer Q5, Q6 and Q7. You are the CFO at a U.S. exporter. It is now June and in December you will receive EUR750,000 from your European customer which you must immediately convert into USD. The spot EUR/USD exchange rate is 1.4524. You would like to hedge your exchange rate risk using the Chicago Mercantile Exchange December EUR/USD futures contract. The notional amount for the futures contract is EUR125,000. The interest rate in the U.S....
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