Question
11] Compaq Computer has a SF 1 million payable in 30 days. Suppose Compaq can borrow in U.S. at 0.7% and invest in Switzerland at
11]
Compaq Computer has a SF 1 million payable in 30 days. Suppose Compaq can borrow in U.S. at 0.7% and invest in Switzerland at 0.5% for 30 days. How could Compaq hedge this payable using a money market hedge? Assume the francs spot rate is $ 0.65.
Group of answer choices
Borrow $993,048 from a U.S. bank today
Borrow SF 995,025 from a Swiss bank today
Borrow SF 1,000,000 today
None of the choices is correct
Borrow $646,766 from a U.S. bank today
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The Analysis And Use Of Financial Statements
Authors: Gerald I. White, Ashwinpaul C. Sondhi, Haim D. Fried
3rd Edition
0471375942, 978-0471375944
