AutoSave Wars ON FX Exercises 2021 99 Com Tell me B Share Home Insert Data Draw Formulas Page Layout X IS A % Conditional Formatting Format as Table Coll Styles * Font Paste Alignment Number Cells Editing Analy Data A A1 x fx B D E G H 1 2 3 4 Foreign Exchange Exercise 1) You feel that the trade dispute between the U.S. and China is nearing a positive conclusion And, you believe that this outcome will be bullish for the Yuan Therefore you take a long position in Yuan against the US$ (for US$1 million) for 30 days. If the market FX rates (trader quotes), perform as noted below, what will be your loss or gain? Investment Amount: $ 1,000,000 5 0 7 B 9 10 Your trade Cash flows Sell US$ Buy Yuan 11 Market Spot US$/Yuan (Today) Bid Offer 6.544 6.548 Buy $ Sell $ Sell Y Buy Y 12 13 14 15 16 Your trade Cash flows Buy US$ Sell Yuan 17 Market Spot US$/Yuan (in 30 days) Bid Offer 6.365 6.368 Buy $ Sell $ Sell Y Buy Y 18 19 20 21 22 Profit or Loss from Foreign Exchange Investment = 23 ⊸NXWXBoa 2) If the pandemic is finally over and Hawaiian Airlines starts to again sell a significant amount of airline tickets in Japan denominated in Yen, what FX hedging trade would you recommend to reduce Hawaiian Airlines' FX risk? 24 25 26 27 28 29 30 31 32 33 34 35 10 Foreign Exchange Questions Ready