Question
A U.S. firm has a receivable of 100,000 in one year. Forward rate quotes are $1.1650/ bid and $1.1645/ ask. If the U.S. firm hedges
A U.S. firm has a receivable of 100,000 in one year. Forward rate quotes are $1.1650/ bid and $1.1645/ ask. If the U.S. firm hedges with a forward, what is the guaranteed amount of USD the U.S. firm will get the receivable?
If you execute a carry trade and the currency in which you borrow appreciates by more than the interest rate differential, the carry trade will not be profitable?
A U.S. firm has a payable to 100,000 in one year, Forward rate quotes are 0.8550/$ bid and 0.8950/$ ask. if the U.S. firm hedges with a forward, what is the guaranteed amount of USD the U.S. firm will expand on the payable?
A U.S. corporation has purchased currency put options to hedge a 100,000 Canadian dollar (C$) receivable. The premium is $.01 and the exercise price of the option is $.75. If the spot rate at the time of maturity is $.85, what is the net amount received by the corporation if it acts rationally? a. $74,000. b. $84,000. c. $75,000. d. $85,000.
A large increase in inflation in Mexico along with a small increase in U.S. inflation is normally expected to cause (assuming no change in interest rates or other factors) a ____ in Mexico demand for U.S. goods, and the Mexican peso should ____.
The Fisher effect is used to determine the: a.real inflation rate. b. real interest rate. c.real spot rate. d.real forward rate.
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