X is a UK based company which has the following US $ Eransacto O ne month : Expected receipt of $240 000. One month : Expected payment of140 000. 3 months : Espected receipts of $300000, The tinanie manager has Collected the following information: Spot rate ( $per E):# 782010.0002 One month forw ard rate (4 per £): 1.7829 0.0003. 3 months forward rate ($per £):1:7846 ±o.0004 Borrowing Deposit 4.6.10 5.11 Moneyrates For x : One year sterling interest rate One year 4.9.%0 dollar interest rate Calculate the erpected stering receipts in 1month and in 3 months using the Foruward martcet. Calylate the enlpected sterling receipts in 3 months using a money market hedge and recommend whether a forwar market hedge or a money market hedge should be used. Dis cuss how Sterling curvency futures contracts could be used to hedge the 3 month dollar receipt when using currency futures, very of ten companies citunnnoi of an imperfect hedge. Explain, using Curhodae and
X is a UK based company which has the following US $ Eransacto O ne month : Expected receipt of $240 000. One month : Expected payment of140 000. 3 months : Espected receipts of $300000, The tinanie manager has Collected the following information: Spot rate ( $per E):# 782010.0002 One month forw ard rate (4 per £): 1.7829 0.0003. 3 months forward rate ($per £):1:7846 ±o.0004 Borrowing Deposit 4.6.10 5.11 Moneyrates For x : One year sterling interest rate One year 4.9.%0 dollar interest rate Calculate the erpected stering receipts in 1month and in 3 months using the Foruward martcet. Calylate the enlpected sterling receipts in 3 months using a money market hedge and recommend whether a forwar market hedge or a money market hedge should be used. Dis cuss how Sterling curvency futures contracts could be used to hedge the 3 month dollar receipt when using currency futures, very of ten companies citunnnoi of an imperfect hedge. Explain, using Curhodae and
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter27: Multinational Financial Management
Section: Chapter Questions
Problem 11P: Boisjoly Watch Imports has agreed to purchase 15,000 Swiss watches for 1 million francs at today’s...
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