Question
I JUST FIX THE CURRENCY PROBLEM THANKS CAN TRY TO SOLVE THIS NOW I APPRECIATE >company based in America has sales in Europe, Asia, and
I JUST FIX THE CURRENCY PROBLEM THANKS CAN TRY TO SOLVE THIS NOW I APPRECIATE
>company based in America has sales in Europe, Asia, and the Americas have receivables in different currencies. , the company delivered a shipment of your products to a major distributor The receivable, 20 million, is due in 90 days, standard terms for the industry in Europe. The companys foreign exchange advisors believe the currency will be at about $1.1904 in 90 days. Management does not use currency options in currency risk management activities.
Assuming: current spot,pounds/ $1.1877, 90-days US interest rate 3.000%, 90-days borrowing rate 4.250%, 90-days pounds borrowing rate 5.750%
determine I. foreword hedge 2. money market hedge, call option hedge. Decide on which hedging preferable'.
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