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hello .. how can I slove (B)? in details please. Thank you! it's a complete question. There is nothing more Spot exchange rate: 118.065/$ (closing

hello .. how can I slove (B)?
in details please. Thank you!
image text in transcribed
image text in transcribed
it's a complete question. There is nothing more
Spot exchange rate: 118.065/$ (closing mid-rates) 1-month forward rate: 117.530/$, a 5.46% per annum premium 3-month forward: 116.628/$, a 4.93% per annum premium 1-year forward: 112.477/$, a 4.97% per annum premium Click on the icon located on the top-right corner of the data table in order to copy its contents into a spreadsheet Money Rates United States Japan Differential One month 4.9500% 0.09375% 4.85625% Three months 5.0000% 0.09375% 4.90625% Twelve months 5.3750% 0.31000% 5.06500% Click on the icon located on the top-right corner of the data table in order to copy its contents into a spreadsheet. Krystal. Krystalis austased company that manufactures, and stars water purification equipment. On April 11, the company sold a system to the City of Nagasaki, Japan, fortion in Nagasaki famous Glover Gardens (whore Puccini's Madame Butterfly waited for the return of Lt Pinkerton). The sale was priced in yon at V22,000,000, with payment in the months. The exchange rate and interest rate data are shown in the popup Window Note that the interest rate differensial vary slightly from the forward discounts on the yen because of time differences for the quotes Tho spot 118.0858,tor examples and pole range. On Apr 11, the spotyen Traced in London from 118.94215 to 117.1875 Krystal's Japanese competitors no currently borrowing yen from Japanese banks to spread of two percentage points above the Japanese moray tato. Krystals weighted average cost of capital is 17%, and the company wishes to protect the dollar value of this receivable 3-meth options are available from Kyushu Bank Call option on $22,000,000 at excite price of $118.0008 a 17% promium, or a pit option on 122,000,000, at exorcite price of P118000$ 3.8% premium. a. What are the costs and benefits of attemate hedges? Which would you recommend and why? b. What is the break even reinvestment rate when comparing forward and many market alternativos? How much in US dollars wil Krystal receive in 3 months with an option hedge if the expected spot rato in 3 months in med to be greater than 118.00015? $ 178864,639 (Round to the nearest cont.) The unhedged position and option hodgo do not guarantee the company of setting for the booked amount, but the forward market hedge and money matkathode do. In this case the money market hodge yields the higher certain proceeds Select from the drop-down menus b. What is the break-ovo reinvestment rate when comparing forward and money market leaves? 5.023 % (Round to three decimal places. Spot exchange rate: 118.065/$ (closing mid-rates) 1-month forward rate: 117.530/$, a 5.46% per annum premium 3-month forward: 116.628/$, a 4.93% per annum premium 1-year forward: 112.477/$, a 4.97% per annum premium Click on the icon located on the top-right corner of the data table in order to copy its contents into a spreadsheet Money Rates United States Japan Differential One month 4.9500% 0.09375% 4.85625% Three months 5.0000% 0.09375% 4.90625% Twelve months 5.3750% 0.31000% 5.06500% Click on the icon located on the top-right corner of the data table in order to copy its contents into a spreadsheet. Krystal. Krystalis austased company that manufactures, and stars water purification equipment. On April 11, the company sold a system to the City of Nagasaki, Japan, fortion in Nagasaki famous Glover Gardens (whore Puccini's Madame Butterfly waited for the return of Lt Pinkerton). The sale was priced in yon at V22,000,000, with payment in the months. The exchange rate and interest rate data are shown in the popup Window Note that the interest rate differensial vary slightly from the forward discounts on the yen because of time differences for the quotes Tho spot 118.0858,tor examples and pole range. On Apr 11, the spotyen Traced in London from 118.94215 to 117.1875 Krystal's Japanese competitors no currently borrowing yen from Japanese banks to spread of two percentage points above the Japanese moray tato. Krystals weighted average cost of capital is 17%, and the company wishes to protect the dollar value of this receivable 3-meth options are available from Kyushu Bank Call option on $22,000,000 at excite price of $118.0008 a 17% promium, or a pit option on 122,000,000, at exorcite price of P118000$ 3.8% premium. a. What are the costs and benefits of attemate hedges? Which would you recommend and why? b. What is the break even reinvestment rate when comparing forward and many market alternativos? How much in US dollars wil Krystal receive in 3 months with an option hedge if the expected spot rato in 3 months in med to be greater than 118.00015? $ 178864,639 (Round to the nearest cont.) The unhedged position and option hodgo do not guarantee the company of setting for the booked amount, but the forward market hedge and money matkathode do. In this case the money market hodge yields the higher certain proceeds Select from the drop-down menus b. What is the break-ovo reinvestment rate when comparing forward and money market leaves? 5.023 % (Round to three decimal places

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