Given answer to first part of Question A. find rest of problem.
Chronos Time Pieces. Chronos Time Pieces of Boston exports watches to many countries, selling in local currencies to stores and distributors. Chrons prides itself on being finanaally conservative. At least 70% of each dividual transaction exposure is hedged most y in the forward market, but o cas only with options Ch 0 0 foreign exchange policy is such that the 70% hedge may be increased up to a 120% hedge i devaluation or depreciation appears imminent Chron os has ust shipped to its major North American distributor. It has issued a 90-day invoice to its buyer for 1,580,000. The current spot rate is $1.2223/, the 90-day forward rate is $1.2288/ Chronos' treasurer, Manny Henandez, has a very good track record in predicting exchange rate movements He currently believes the euro will weaken against the dollar in the coming 90 to 120 days, possibly to around $1.1577/ .Evaluate the hedging altermatives for Chronos if Manny is right (Case 1: $1.1577/E) and if Manny is wrong (Case 2 $1.2549 /e), What do you recommend? b, what does it mean to hedge 120% of a transaction exposure? c. What would be considered the most conservative transaction exposure management policy by a firm? How does Chronos compare? a. Case 1: Manny is right and the spot rate in 90 days is $1.1577/ How much in U S dollars will Chronos receive in 90 days if 100% of the transaction exposure is hedged with the forward contract? s 1941504 (Round to the nearest dollar.) How much in U S dollars will Cronos receive in 90 days if 70% of the transaction exposure is hedged with the forward contract? (Round to the nearest dollar) Enter your answer in the answer box and then click Check Answer ndows 6 Pemiaining Clear All Check Asrstrer Chronos Time Pieces. Chronos Time Pieces of Boston exports watches to many countries, selling in local currencies to stores and distributors. Chrons prides itself on being finanaally conservative. At least 70% of each dividual transaction exposure is hedged most y in the forward market, but o cas only with options Ch 0 0 foreign exchange policy is such that the 70% hedge may be increased up to a 120% hedge i devaluation or depreciation appears imminent Chron os has ust shipped to its major North American distributor. It has issued a 90-day invoice to its buyer for 1,580,000. The current spot rate is $1.2223/, the 90-day forward rate is $1.2288/ Chronos' treasurer, Manny Henandez, has a very good track record in predicting exchange rate movements He currently believes the euro will weaken against the dollar in the coming 90 to 120 days, possibly to around $1.1577/ .Evaluate the hedging altermatives for Chronos if Manny is right (Case 1: $1.1577/E) and if Manny is wrong (Case 2 $1.2549 /e), What do you recommend? b, what does it mean to hedge 120% of a transaction exposure? c. What would be considered the most conservative transaction exposure management policy by a firm? How does Chronos compare? a. Case 1: Manny is right and the spot rate in 90 days is $1.1577/ How much in U S dollars will Chronos receive in 90 days if 100% of the transaction exposure is hedged with the forward contract? s 1941504 (Round to the nearest dollar.) How much in U S dollars will Cronos receive in 90 days if 70% of the transaction exposure is hedged with the forward contract? (Round to the nearest dollar) Enter your answer in the answer box and then click Check Answer ndows 6 Pemiaining Clear All Check Asrstrer