Question
Assume that Parker Co. will receive SF500,000 in 90 days. The 360-day borrowing and deposit rate in the U.S. is 7% and 6%, respectively. The
Assume that Parker Co. will receive SF500,000 in 90 days. The 360-day borrowing and deposit rate in the U.S. is 7% and 6%, respectively. The 360-day borrowing and deposit rate in Switzerland is 5% and 4%, respectively. Assume the forward rate of the Swiss franc is $.50 and the spot rate of the Swiss franc is $.48. If Parker Co. uses a money market hedge, how many SF does it borrow now? (Please round up to 2 decimals.)
In the previous question of Parker Co., how many dollars can Park receive when it converts borrowed SF to dollars now? (Please round up to 2 decimals.)
In the previous question of Parker Co., how many dollars will Park receive in 90 days if it uses money market hedge? (Please round up to 2 decimals.)
In the previous question of Parker Co., how many dollars will Park receive in 90 days if it uses the forward hedge? (Please round up to 2 decimals.)
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