Currency Risk Coverage Case As Manager of our Finance and Administration Direction of the company Exports, SA, you are considering the exchange at which the company is exposed as a consequence of the exchange rate between the peso and the dollar at the time of payment of the invoices to your suppliers in the United States, which is done in dollars. Based on the company's budget, the following payments to its suppliers in the United States are estimated (all payments are made in the middle of the indicated month) Month June July August September October November December Amount 2,450,000 1,630,000 890,000 2,540,000 3,250,000 4,325,000 2,450,000 USD You estimates that the exchange rate of the peso with respect to the dollar will imply a trend towards the depreciation of the peso, so you want to make a mapping of the different exchange risk hedging alternatives and compare it with the exchange rate probable spot for each of the payment dates in the middle of each month), that is, the decision to be covered for the exchange rate variations. Various coverage alternatives are considered. 4. Hedge in the market with options (only for those months in which the options contract expires). 5. In the cases of point 4, also consider covering yourself in the market with 50% of futures and 50% of options. 6. Prepare a table of effective exchange rates, considering the following spot exchange rates on each of the dates expiration: 18.00 19.00 20.00 21.00 22.00 23.00 24.00 25.00 26.00 27.00 Some of the data with which the company negotiates. Interest rates "negotiated by the company with the bank. Interest or yield rates Annual interest rate stipulated for loans. Annual interest rate stipulated for investments Company capital cost United States 3.96% 0.72% Does not apply Mexico 10.80% 3.24% 16.0% Additional information on the derivatives market: Concept Size of futures or options contract (in dollars) MEXDER Contract cost (pesos). Initial margin requirement for futures contract or sale of options (pesos). Futures 10,000 250 2.500 Options 10.000 200 2.500 Currency Risk Coverage Case As Manager of our Finance and Administration Direction of the company Exports, SA, you are considering the exchange at which the company is exposed as a consequence of the exchange rate between the peso and the dollar at the time of payment of the invoices to your suppliers in the United States, which is done in dollars. Based on the company's budget, the following payments to its suppliers in the United States are estimated (all payments are made in the middle of the indicated month) Month June July August September October November December Amount 2,450,000 1,630,000 890,000 2,540,000 3,250,000 4,325,000 2,450,000 USD You estimates that the exchange rate of the peso with respect to the dollar will imply a trend towards the depreciation of the peso, so you want to make a mapping of the different exchange risk hedging alternatives and compare it with the exchange rate probable spot for each of the payment dates in the middle of each month), that is, the decision to be covered for the exchange rate variations. Various coverage alternatives are considered. 4. Hedge in the market with options (only for those months in which the options contract expires). 5. In the cases of point 4, also consider covering yourself in the market with 50% of futures and 50% of options. 6. Prepare a table of effective exchange rates, considering the following spot exchange rates on each of the dates expiration: 18.00 19.00 20.00 21.00 22.00 23.00 24.00 25.00 26.00 27.00 Some of the data with which the company negotiates. Interest rates "negotiated by the company with the bank. Interest or yield rates Annual interest rate stipulated for loans. Annual interest rate stipulated for investments Company capital cost United States 3.96% 0.72% Does not apply Mexico 10.80% 3.24% 16.0% Additional information on the derivatives market: Concept Size of futures or options contract (in dollars) MEXDER Contract cost (pesos). Initial margin requirement for futures contract or sale of options (pesos). Futures 10,000 250 2.500 Options 10.000 200 2.500