in both Can and U.S. dollars, it can choose which currency to exchange the euros for at the end of the various periods. Which currency appears to offer the better rates in the forward market? (Click on the icon to impor spreadsheet.) Period spot 1 month 2 months 3 months 6 months 12 months Days Forward 30 60 90 180 360 C$/euro 1.3385 1.3409 1.3433 1.3455 1.3481 1.3508 US$/euro 1.3243 1.3248 1.3254 1.3259 1.3261 1.3285 Calculate the forward premium, the Canadian dollar proceeds, and the difference from the spot rate proceeds in the C$/Euro forward market below: (Round the forward premium to three decimal places and the amounts to the nearest cent.)
in both Can and U.S. dollars, it can choose which currency to exchange the euros for at the end of the various periods. Which currency appears to offer the better rates in the forward market? (Click on the icon to impor spreadsheet.) Period spot 1 month 2 months 3 months 6 months 12 months Days Forward 30 60 90 180 360 C$/euro 1.3385 1.3409 1.3433 1.3455 1.3481 1.3508 US$/euro 1.3243 1.3248 1.3254 1.3259 1.3261 1.3285 Calculate the forward premium, the Canadian dollar proceeds, and the difference from the spot rate proceeds in the C$/Euro forward market below: (Round the forward premium to three decimal places and the amounts to the nearest cent.)
Chapter11: Managing Transaction Exposure
Section: Chapter Questions
Problem 1ST
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Transcribed Image Text:Victoria Exports (Canada). A Canadian exporter, Victoria Exports, will be receiving six payments of €12,100, ranging from now to 12 months in the future. Since the company keeps cash balances in both Canadian dollars
and U.S. dollars, it can choose which currency to exchange the euros for at the end of the various periods. Which currency appears to offer the better rates in the forward market? (Click on the icon to import the table into a
spreadsheet.)
Period
spot
1 month
2 months
3 months
6 months
12 months
Period
Spot
Days Forward
Days
Forward
-
0
30
60
90
180
360
C$/euro
C$/euro
Calculate the forward premium, the Canadian dollar proceeds, and the difference from the spot rate proceeds in the C$/Euro forward market below: (Round the forward premium to three decimal places and the Canadian dollar
amounts to the nearest cent.)
1.3385
1.3409
1.3433
1.3455
1.3481
1.3508
1.3385
US$/euro
1.3243
1.3248
1.3254
1.3259
1.3261
1.3285
Forward Premium
on the C$/euro
D
CS
C$ Proceeds of
€12,100
(…)
C$
Difference
Over Spot
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