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a 11. (8 points) Suppose your firm is a Swiss cxporter of bicycles and importer of bells. You have sold an order to a French
a 11. (8 points) Suppose your firm is a Swiss cxporter of bicycles and importer of bells. You have sold an order to a French firm for 2,000,000 worth of bicycles and imported bells worth 1,000,000 from the same firm. The payment to the French firm (in curo) and the receivables from the same French firm (in euro) are due in 12 months. Use the information in the table to compute the value of your nct receivable in SFr if you use a money market hedge. Show all the steps your firm should take in order to do the money market hedge. Exchange Rates Spot Rate 12 Month Forward Rate 1 - $1.56 1 - $1.50 1 - $1.25 1 - $1.15 SFrl - $1.02 SERI $0.95 U.K. i-3.22% Europe te - 5.00% U.S. is - 1.50% Switzerland 8.00% Interest Rates: iser Solution
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