Question
Firm AAA is located in the U.S.. It has sold a Germany firm 1,000,000 worth of product. The receivable will be collected a year later.
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Firm AAA is located in the U.S.. It has sold a Germany firm 1,000,000 worth of product. The receivable will be collected a year later. Please refer to the following to calculate the amount they receive in a year based on money market hedging approach.
Annual interest rate in the U.S. = 4%.
Annual interest rate in Germany = 6%.
the current spot rate = $1.40/euro
The spot rate at maturity one year later = $1.3/euro
$1,409,451
$1,369,016
$1,275,472
$1,373,585
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The Legal Environment Today Summarized Case Edition
Authors: Roger LeRoy Miller
8th Edition
130526276X, 978-1305279407, 1305279409, 978-1305704930, 1305704932, 978-1305262768
