Question
Assume the following information: U.S. 1-year deposit rate=10% U.S. 1-year borrowing rate=12% Swiss franc 1-year deposit rate=8% Swiss franc 1-year borrowing rate=10% Swiss franc 1-year
Assume the following information: U.S. 1-year deposit rate=10% U.S. 1-year borrowing rate=12% Swiss franc 1-year deposit rate=8% Swiss franc 1-year borrowing rate=10% Swiss franc 1-year forward rate=$.40 Swiss franc spot rate=$.39 Also assume the U.S. exporter denominates its Swiss franc exports in Swiss francs and expect to receive SF600,000 in 1 year. Using this information, what will be the value of these exports in 1 year in U.S. dollars given that the firm executes a money market hedge? Group of answer choices $238,584 $240,000 $234,000 $236,127
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