Question
Given that firm X has a payment of 5,000,000,000 USD due in 3 months to their supplier, how do you calculate using forward hedge, money
Given that firm X has a payment of 5,000,000,000 USD due in 3 months to their supplier,
how do you calculate using forward hedge, money market hedge, and option hedging?
(AUD/USD)
Spot Rate = 0.7754
3 Months Forward Rate = 0.7709
Also is the reciprocal on those rates applicable?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To calculate how firm X can hedge its payment of 5000000000 USD due in 3 months using forward hedge money market hedge and option hedging we will use ...
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Step: 2
Step: 3
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International financial management
Authors: Jeff Madura
9th Edition
978-0324593495, 324568207, 324568193, 032459349X, 9780324568202, 9780324568196, 978-0324593471
