An Australian firm has net receivables of 200,000 SGD in three-months' time as compensation for work...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
An Australian firm has net receivables of 200,000 SGD in three-months' time as compensation for work undertaken. Current spot rate is AUD/SGD 0.9819/0.9855 Interest rates in Singapore are currently 1.6% for investing and 4% for borrowing. Australian interest rates are currently 0.2% for investing and 3.6% for borrowing. All interest rates are quoted in annual nominal terms. The firm wishes to implement a money market hedge. To implement a money market hedge (no change in the timing of cash flows, only the currency), how much should be invested by the firm? (Answer to the nearest dollar) O 194,436 AUD 194,628 AUD 198,020 SGD 201,670 AUD None of the other options are correct 199,203 SGD 200,933 AUD An Australian firm has net receivables of 200,000 SGD in three-months' time as compensation for work undertaken. Current spot rate is AUD/SGD 0.9819/0.9855 Interest rates in Singapore are currently 1.6% for investing and 4% for borrowing. Australian interest rates are currently 0.2% for investing and 3.6% for borrowing. All interest rates are quoted in annual nominal terms. The firm wishes to implement a money market hedge. To implement a money market hedge (no change in the timing of cash flows, only the currency), how much should be invested by the firm? (Answer to the nearest dollar) O 194,436 AUD 194,628 AUD 198,020 SGD 201,670 AUD None of the other options are correct 199,203 SGD 200,933 AUD
Expert Answer:
Answer rating: 100% (QA)
To implement a money market hedge the firm would need to calculate the amount to be invested in orde... View the full answer
Posted Date:
Students also viewed these finance questions
-
At the beginning of this year, Wagner Corporation had 4 0 0 , 0 0 0 shares of common stock outstanding. - The firm paid a 1 0 percent stock dividend on April 1 of this year. - The firm issued 9 0 , 0...
-
You are the manager of a U.S. company situated in Los Angeles and manages the import/export division of the company. The company distributes (resells) a variety of consumer products imported to the...
-
1. Assume that U.S. and Argentine investors require a real return of 2 percent. If the U.S. nominal interest rate is 5 percent, and Argentina's nominal interest rate is 7 percent, then according to...
-
The IASB's main objective is to develop a set of high-quality standards for financial reporting by companies at the international level. Required: Critically examine the possibility of achieving this...
-
Prepare the statement of cash flows under the indirect method for the Snail Company using the information from P6- 10 and the following cash flow information: In p6-10 Snal Company Income Statement...
-
Refer to the Sunflower Data Set. 1. Compute Sunflower's indirect cost allocation rate. 2. Compute the total costs assigned to the Wilson and Nanry engagements. 3. Compute the operating income from...
-
Dylan Karraker Company has income from continuing operations of \($240,000\) for the year ended December 31, 2002. It also has the following items (before considering income taxes): ( 1 ) an...
-
The Hannam Company decided to change from the declining- balance method of depreciation to the straight- line method effective 1 January 20X7. The following information was provided: The company has...
-
9,617,274 The 7 in the thousands place is the value of the 7 in the tens place.
-
Cost flow methods The following three identical units of Item P401C are purchased during April: Apr. 2 Apr. 15 Apr. 20 Total Average cost per unit ($408 + 3 units) Item Beta Units Cost Purchase 1...
-
Many polls are conducted over the telephone. Some polling organizations choose a sample of phone numbers to call from lists that include landline phone numbers only, and do not include cell phones....
-
A scientist wants to determine whether people who live in places with high levels of air pollution get more colds than people in areas with little air pollution. Do you think it is possible to design...
-
In an observational study, people who ate four or more servings of fresh fruits and vegetables each day were less likely to develop colon cancer than people who ate little fruit or vegetables. True...
-
Is the area of a college campus discrete or continuous?
-
_______________are highly unreliable in part because people who have strong opinions are more likely to participate. In Exercises 35, fill in each blank with the appropriate word or phrase.
-
Acadia Logistics anticipates that it will need more distribution center space to accommodate what it believes will be a significant increase in demand for its final-mile services. Acadia could either...
-
From a medical tourist perspective, compare Shouldice with the traditional hospital in terms of the key factors of competition. Using Table 15-3, why would Shouldice attract patients from outside the...
-
Data for the Frank B. Robinson Company are presented in PI2-5B. Further analysis reveals the following. 1. Accounts payable pertain to merchandise suppliers. 2. All operating expenses except for...
-
P12-8B Data for Bruce Willis Company is presented in P12-7B. Further analysis reveals the following. 1. Accounts payable relates to merchandise creditors. 2. All operating expenses, except...
-
The financial statements of Bruce Willis Company appear below. Additional information: 1. Plant assets were sold at a sales price of \($37,500\). 2. Additional equipment was purchased at a cost of...
Study smarter with the SolutionInn App