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Please answer the following questions and all its parts(max 4 parts according to chegg). Failure to do so will result in negative rating. I will
Please answer the following questions and all its parts(max 4 parts according to chegg). Failure to do so will result in negative rating. I will give good rating if complete. Thanks!
I Finance 20171 Question 1 : x trades regularly with customers in different countries. Its home currency is the dollar. The company expects to receive 1.6 million euros in 6 months time from a foreign customer. current exchanges in the rates in the home country of are: Exchange rate & Euro per dollar Spot 0.9431-0.9456 6 month forward 0.4360-0.9394 12 month forward 0.4368 0.9406 ca) Calculate the rate of forward premium of the euro on the 12-month forward exchange rate both for buying and selling rates. (b) Assuming that a forward contract is the only hedging tool Lavailable in the home country off, calculate the dollar receipts of the 1.6 million euros receivable from the foreign customer under a hedge and condition. (C) of the current spot rate at the end of 6 months is Idollar: Euros 0.9325-0.9400, comment on y s hedging decision. (d) Discuss whether& should avoid exchange rate rist by invoincing foreign customers in dollars. I Finance 20171 Question 1 : x trades regularly with customers in different countries. Its home currency is the dollar. The company expects to receive 1.6 million euros in 6 months time from a foreign customer. current exchanges in the rates in the home country of are: Exchange rate & Euro per dollar Spot 0.9431-0.9456 6 month forward 0.4360-0.9394 12 month forward 0.4368 0.9406 ca) Calculate the rate of forward premium of the euro on the 12-month forward exchange rate both for buying and selling rates. (b) Assuming that a forward contract is the only hedging tool Lavailable in the home country off, calculate the dollar receipts of the 1.6 million euros receivable from the foreign customer under a hedge and condition. (C) of the current spot rate at the end of 6 months is Idollar: Euros 0.9325-0.9400, comment on y s hedging decision. (d) Discuss whether& should avoid exchange rate rist by invoincing foreign customers in dollarsStep by Step Solution
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