Problem 13 > A late penalty of 20% will apply to new answers. Intro Your company expects to receive 200,000 euros in one year from exporting to France. Consider the following information about the U.S. and Brazil: U.S. France 2% 5% Expected inflation rate Nominal interest rate 3.4% 4.4% Spot rate $1.08 per euro Part 1 - Attempt 2/10 for 9 pts. How much will your company receive if your company hedges its receivables and interest rate parity holds (in $)? 213,931 Correct Forward premium (IRP): 1 + 0.034 1 = 1 + 0.044 1+rh 1 = -0.00958 1+1f Forward rate: = = F = S(1 + p) $1.08 / (1 + ( - 0.00958)) = $1.07/ Selling euros at forward rate: Vg = Ve F = 200,000 - $1.07/ = $213,931 = Part 2 Attempt 1/10 for 8 pts. How much will your company receive if your company does not hedge its receivables and the international Fisher effect holds (in $)? 0+ decimals Submit