P is required to pay $300,000 in 1year, forward rate 1$ = 765 and spot rate 1$=760.ParticularsIndia US1 year Deposit Rate1 year Borrowing Rate 5.00% 5.50%4.50% 5.00%Calculate the amount payable under money market hedge.

Here, Required Amount is $300,000 Forward Rate 1$=₹65 Spot Rate 1$=₹60 1 year Deposit of India is…

P is required to pay $300,000 in 1year, forward rate 1$ = 765 and spot rate 1$=760. Particulars India US 1 year Deposit Rate 4.50% 5.00% 1 year Borrowing Rate 5.00% 5.50% Calculate the amount payable under money market hedge.

P is required to pay $300,000 in 1year, forward rate 1$ = 765 and spot rate 1$=760. Particulars India US 1 year Deposit Rate 4.50% 5.00% 1 year Borrowing Rate 5.00% 5.50% Calculate the amount payable under money market hedge.

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 26E

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Concept explainers

Mortgages

A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.

Mortgage

The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.

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P is required to pay $300,000 in 1year, forward rate 1$ = 765 and spot rate 1$=760.
Particulars
India US
1 year Deposit Rate
1 year Borrowing Rate 5.00% 5.50%
4.50% 5.00%
Calculate the amount payable under money market hedge.

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