Question
Assume the following information: 180day U.S. interest rate = 8% 180day British interest rate = 9% F t.180-day = 1.50 USD/GBP S t = 1.48
Assume the following information:
180day U.S. interest rate = 8%
180day British interest rate = 9%
Ft.180-day = 1.50 USD/GBP
St = 1.48 USD/GBP
Assume that Riverside Corp. from the United States will receive GBP 400,000 in 180 days. Would it be better off using a forward hedge or a money market hedge? Substantiate your answer with estimated revenue for each type of hedge.
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
6th International Edition
0071229035, 978-0071229036
