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In one year's time, a US-MNC will receive payment of GBP5 million. The current spot rate is USD1.234/GBP. The GBP interest rate 5.15%, the USD
In one year's time, a US-MNC will receive payment of GBP5 million. The current spot rate is USD1.234/GBP. The GBP interest rate 5.15%, the USD interest rate is 6.30%. The one-year forward rate is USD1.153/GBP. How much better off is the US-MNC using a money market hedge compared with a forward contract? O a. USD5,765,000 O b. USD472,479 c. USD338,250 O d. The US-MNC should be indifferent between using a money market hedge and a forward contract since the value of the hedges for each approach are equal. In one year's time, a US-MNC will receive payment of GBP5 million. The current spot rate is USD1.234/GBP. The GBP interest rate 5.15%, the USD interest rate is 6.30%. The one-year forward rate is USD1.153/GBP. How much better off is the US-MNC using a money market hedge compared with a forward contract? a. USD5,765,000 b. USD 472,479 c. USD 338,250 d. The US-MNC should be indifferent between using a money market hedge and a forward contract since the value of the hedges fo each approach are equal
In one year's time, a US-MNC will receive payment of GBP5 million. The current spot rate is USD1.234/GBP. The GBP interest rate 5.15%, the USD interest rate is 6.30%. The one-year forward rate is USD1.153/GBP. How much better off is the US-MNC using a money market hedge compared with a forward contract? O a. USD5,765,000 O b. USD472,479 c. USD338,250 O d. The US-MNC should be indifferent between using a money market hedge and a forward contract since the value of the hedges for each approach are equal.
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