Question
Kenny Inc. is an American firm that will receive MYR 1,704,000 in a year. The annual interest rates in Malaysia and the US are 10%
Kenny Inc. is an American firm that will receive MYR 1,704,000 in a year. The annual interest rates in Malaysia and the US are 10% and 12%, respectively. The spot exchange rate for a US dollar is MYR 2.0394 and the expected exchange rate in one year is MYR 2.1456. If the company wants to hedge the receivable using the money market hedge, how much US dollars should the company invest in the United States today?
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To hedge the receivable using a money market hedge Kenny Inc needs to determine how much US dollars ...
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Financial Markets and Institutions
Authors: Jeff Madura
12th edition
9781337515535, 1337099740, 1337515531, 978-1337099745
