Question
Celine Co. will need 500,000 in 90 days to pay for German imports. Today's 90-day forward rate of the euro is $1.07. The spot rate
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Celine Co. will need 500,000 in 90 days to pay for German imports. Today's 90-day forward rate of the euro is $1.07. The spot rate of the euro in 90 days is forecasted to be $1.02. Based on this information, the expected value of the real cost of hedging payables is $____.
a. 10,700
b. 25,000
c. 107,000
d. 25,000
Celine Co. will need 500,000 in 90 days to pay for German imports. Today's 90-day forward rate of the euro is $1.07. The spot rate of the euro in 90 days is forecasted to be $1.02. Based on this information, the expected value of the real cost of hedging payables is $____.
| a. | 10,700 | |
| b. | 25,000 | |
| c. | 107,000 | |
| d. | 25,000 |
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Public Finance A Contemporary Application Of Theory To Policy
Authors: David N Hyman
8th Edition
0324259700, 978-0324259704
