Question
Mondelez, a US food and beverage company, is expected to receive CHF1,500,000 in 3 months time for foodservice products from Nestle in Switzerland. The following
- Mondelez, a US food and beverage company, is expected to receive CHF1,500,000 in 3 months time for foodservice products from Nestle in Switzerland. The following information is available:
| Spot exchange rate | USD0.98/CHF |
| 3-month forward exchange rate | USD1.07/CHF |
| USD interest rate | 1.75% p.a. |
| CHF interest rate | 1.25% p.a. |
There are call and put options available on the pound with a strike price of USD1.06/CHF and USD1.12/CHF, respectively. The call and put options are selling for a premium of 2.85 U.S. Dollar (USD) cents and 3.25 cents per Swiss Franc (CHF), respectively. What is the minimum dollar receivable if Mondelez hedges?
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The World Is Your Oyster The Guide To Finding Great Investments Around The Globe
Authors: Jeff D. Opdyke
1st Edition
0307381048, 978-0307381040
