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Maria Gonzalez and Ganado. Ganado-the U.S.-based company discussed in this chapter-has concluded another large sale of telecommunications equipment to Regency (U.K.). Total payment of E3,100,000

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Maria Gonzalez and Ganado. Ganado-the U.S.-based company discussed in this chapter-has concluded another large sale of telecommunications equipment to Regency (U.K.). Total payment of E3,100,000 is due in 90 days. Maria Gonzalez has also learned that Ganado will only be able to borrow in the United Kingdom at 14.884% per annum (due to credit concerns of the British banks). Given the exchange rates and interest rates in the popup window, compare altemate ways below that Ganado might hedge its foreign exchange transaction exposure. Assume a 360 -day financial year. a. How much in U.S. dollars will Ganado receive in 90 days without a hedge if the expected spot rate in 90 days is the same as the current spot rate of $1.7588/ ? The 90-day forward rate of $1.7433/ ? The expected spot rate of $1.7905 ? b. How much in U.S. dollars will Ganado receive in 90 days with a fonward market hedge? c. How much in U.S. dollars will Ganado receive in 90 days with a money market hedge? d. How much in U.S. dollars will Ganado receive in 90 days with an option market hedge? a. How much in U.S. dollurs will Ganado receive in 90 days without a hedge if the expected spot rate in 90 days is the same as the current spot rate of $1.7588/ ? (Round to the nearest dollar.) Maria Gonzalez and Ganado. Ganado-the U.S.-based company discussed in this chapter-has concluded another large sale of telecommunications equipment to Regency (U.K.). Total payment of 3,100,000 is due in 90 days. Maria Gonzalez has also learned that Ganado will only be able to borrow in the United Kingdom at 14.884% per annum (due to credit concerns of the British banks). Given the exchange rates and interest rates in the popup window, , compare alternate ways below that Ganado might hedge its foreign exchange transaction exposure. Assume a 360 -day financial year. a. How much in U.S. dollars will Ganado receive in 90 days without a hedge if the expected spot rate in 90 days is the same as the current spot rate of $1.7588/f ? The 90 -day forward rate of $1.7433/ ? The expected spot rate of $1.7905/ ? b. How much in U.S. dollars will Ganado receive in 90 days with a forward market hedge? c. How much in U.S. dollars will Ganado receive in 90 days with a money market hedge? d. How much in U.S. dollars will Ganado receive in 90 days with an option market hedge? e. What transaction exposure hedge is now in Ganado's best interest? Data table

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