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eBook Your employer, a large MNC, has asked you to assess its transaction exposure. Its projected cash flows are as follows for the next year.
eBook Your employer, a large MNC, has asked you to assess its transaction exposure. Its projected cash flows are as follows for the next year. Danish krone Inflows equal DK40,000,000 while outflows equal DK30,000,000. British pound inflows equal 3,000,000 while outfiows equal 2,000,000. The spot rate of the krone is $0.14, while the spot rate of the pound is $1.47. Assume that the movements in the Danish krone and the British pound are highly correlated Provide your assessment as to your firm's degree of transaction exposure (as to whether the exposure is high or low). Substantiate your answer. Use a minus sign to enter a negative value, If any. Round your answers for net inflows to the nearest whole number and for values of exposure to the nearest dollar Net Inflows in Current Foreign Currency Foreign Currency Exchange Rate Value of Exposure Danish Krone (DK) DK $0.14 $ British pound (E) $1.47 The krone exposure shows -Select- v net inflow, the pound exposure shows -Select-vnet Inflow. Thus, their exposure should be -Select vir their exchange rates against the U.S. dollar continue to be highly correlated $ exposure. Its projected cash flows are as f tish pound inflows equal 3,000,000 while le that the movements in the Danish Krone osure (as to whether the exposure is high net inflows to the nearest whole number a vs in Current Frency Exchange Rate Value $0.14 $ $1.47 $ are show: -Select- het inflow. Thus, their e h ted. positive negative the next year. Danish Krone equal 2,000,000. The spot rate of British pound are highly correlated. ubstantiate your answer. Use a lues of exposure to the nearest sure f their e should be -Select- magmfied reduced g
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