Cost of money market Hedge = $829.54
Can You help me with this? Ill rate 5 stars Money Market Hedge on Payables. Blake...
Blake Inc. needs €2,000,000 in 30 days. It can earn 5 percent annualized on a German security. The current spot rate for the euro is $1.00. Blake can borrow funds in the U.S. at an annualized interest rate of 6 percent. If Blake uses a money market hedge to hedge the payable, what is the cost of implementing the hedge?
Blake Inc., a U.S. MNC, needs to pay EUR1,000,000 in one year. It can earn 2 percent annualized on a German security. The current spot rate for the euro is USD1.00 per euro. Blake can borrow funds in the U.S. at an annualized interest rate of 0 percent. If Blake uses a money market hedge to hedge the payable, what is the cost of implementing the hedge (rounded to the nearest dollar)? $980,392 None of the answers is correct. $1,000,000....
QUESTION 20 Blake Inc., a U.S. MNC, needs to pay EUR1,000,000 in one year. It can earn 2 percent annualized on a German security. The current spot rate for the euro is USD1.00 per euro. Blake can borrow funds in the U.S. at an annualized interest rate of O percent. If Blake uses a money market hedge to hedge the payable, what is the cost of implementing the hedge (rounded to the nearest dollar)? $980,392 None of the answers is...
Paul Inc. needs €1,160,000 in 30 days. Delaney can earn 0.05 annualized on a German security. The current spot rate for the euro is $1.00. Delaney can borrow funds in the U.S. at an annualized interest rate of .06. If Delaney uses a money market hedge, how much should it borrow in the U.S.?
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Future Hedge on Receivables. Suppose it is the middle of February, and Nancy Foods, an American firm, has just contracted to sell frozen chickens to a German firm. Nancy firms will receive €250,000 in the middle of March and is considering hedging the exposure with futures contracts. The contract size of the euro futures is €125,000, so Nancy Foods uses two contracts. Will Nancy foods buy or sell the futures...
You run a hedge fund with a line of credit that allows you to borrow $100 million at an annual interest rate of 5%. The minimum amount of time that you can borrow for is one day. There are 365 days in a year. The spot rate for a euro is $1.13. The spot rate for a yen is $0.0090. The spot rate between yen and euros is ¥130/€. Which currencies should you buy or sell to take advantage of...
QUESTION 14 You are a U.S.-based treasurer with $1,000,000 to invest. The dollar-euro exchange rate is quoted as $1.00 - €1.00 and the dollar-pound exchange rate is quoted at $1.80 - 21.00. If a bank quotes you a cross rate of £1.00 - €1.50, how much money can an astute trader make? No arbitrage is possible. $1,160,000 $200,000 $250,000 Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All Answers Save and...
Can you please help me with solving this papers regarding money
theory (economic - FINANCE) ? i don't want the
steps just the correct answer
. Comists Stout Shows. mists Store Study the issue of money seriously because the evidence money supply ond price reuels move very closely together wry and interest rate movements are related to cach other The sunward trend in business economic Controle (economic Contraction is caused by the decline s in monetary prowth coused by All of...
Module 9 – Foreign Exchange Rate Risk Homework Exercise Part 1 1. Suppose that the EUR:USD is trading at 1.3342; the GBP:JPY is trading at 67.7600; and the EUR:GBP is trading at 0.8165. What should the USD:JPY rate be? 2. If a price index for US goods stands at 118.93 and the same price index for European goods (i.e., computed from the same consumption basket) stands at 183.34; what is the fair (under the theory of PPP) spot exchange rate...
You are the manager of a U.S. company situated in Los Angeles and manages the import/export division of the company. The company distributes (resells) a variety of consumer products imported to the U.S.A from France and also exports goods manufactured in the U.S.A. to Britain. Therefore, your company is very much dependent on the impact of current and future exchange rates on the performance of the company. Scenario 1: You have to estimate the expected exchange rates one year from...