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Due to your export to Thailand, you have an account receivable in six months from today in the amount of 525.00 million in Thai Baht
Due to your export to Thailand, you have an account receivable in six months from today in the amount of 525.00 million in Thai Baht (TB). The data that you have compiled are below. In addition, you are told that for simplicity you should assume that the interest rate in each country is the same for borrowing or lending. You would like to hedge the foreign exposure of this account. Thai Baht (TB) is the currency of Thailand. Spot rate: TB 32.72/$ Forward rate (six months): TB 34.30/$ U.S. prime rate: 3.2 percent (borrowing or lending). Prime rate is an interest rate. Thailand interest rate: 6.0 percent (borrowing or lending) The firm borrows and invests at the market rates. Answer questions 1 through 6 based on the above information. If at the end of the six months, the spot rate happens to be TB 35.33/$: O you will not be able to decide what to do. you will let the option expire you will be indifferent O you will execute the option O none of the answers in this question makes any sense Due to your export to Thailand, you have an account receivable in six months from today in the amount of 525.00 million in Thai Baht (TB). The data that you have compiled are below. In addition, you are told that for simplicity you should assume that the interest rate in each country is the same for borrowing or lending. You would like to hedge the foreign exposure of this account. Thai Baht (TB) is the currency of Thailand. Spot rate: TB 32.72/$ Forward rate (six months): TB 34.30/$ U.S. prime rate: 3.2 percent (borrowing or lending). Prime rate is an interest rate. Thailand interest rate: 6.0 percent (borrowing or lending) The firm borrows and invests at the market rates. Answer questions 1 through 6 based on the above information. If at the end of the six months, the spot rate happens to be TB 35.33/$: O you will not be able to decide what to do. you will let the option expire you will be indifferent O you will execute the option O none of the answers in this question makes any sense
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