Question
Assume that Yorkshire Dales Co. expects to receive 600,000 Swiss francs in 90 days. What is the value of the receivables assuming the firm uses
Assume that Yorkshire Dales Co. expects to receive 600,000 Swiss francs in 90 days. What is the value of the receivables assuming the firm uses a forward hedge, given the following information?
| U.S. deposit rate for 1 year | = | 12% |
| U.S. borrowing rate for 1 year | = | 13% |
| Swiss deposit rate for 1 year | = | 6% |
| Swiss borrowing rate for 1 year | = | 8% |
| Swiss forward rate for 1 year | = | $0.89 |
| Swiss franc spot rate | = | $0.87 |
Options:
| $534,000 | |
| $522,000 | |
| $546,000 | |
| $538,800 | |
| $585,264 |
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Fixed Income Securities Tools For Todays Markets
Authors: Bruce Tuckman, Angel Serrat
4th Edition
1119835550, 978-1119835554
