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Question 1 1 pts The following information is for Questions 1-3. Parker Company needs to pay SF200,000 in 1 year to its supplier. Assume the
Question 1 1 pts The following information is for Questions 1-3. Parker Company needs to pay SF200,000 in 1 year to its supplier. Assume the following interest rates available to Parker for borrowing and lending (investing) in USD and SF: U.S. (USD) Switzerland (SF) 11-year borrowing rate 6% 5% 1-year lending rate 6% 5% Assume the current 1-year forward rate of the Swiss franc is $0.50/SF and the current spot rate of the Swiss franc is $0.48/SF If Parker Company uses a 100% money market hedge today, it needs to pay in 1-year $99.057 $100.952 $105,094 $96,914 Question 2 1 pts The following information is for Questions 1-3. Parker Company needs to pay SF200,000 in 1 year to its supplier. Assume the following interest rates available to Parker for borrowing and lending investing) in USD and SF: U.S. (USD) Switzerland (SF) 1-year borrowing rate 6% 5% 1-year lending rate 6% 5% Assume the current 1-year forward rate of the Swiss franc is $0.50 SF and the current spot rate of the Swiss franc is $0 48/SF If Parker Company uses a 100% forward hedge today, it needs to pay in 1-year 596.000 $100.000 $200,000 $50.000 Question 3 1 pts The following information is for Questions 1-3. Parker Company needs to pay SF200,000 in 1 year to its supplier. Assume the following interest rates available to Parker for borrowing and lending investing) in USD and SF: U.S. (USD) Switzerland (SF) 1-year borrowing rate 6% 5% 1-year lending rate 6% 5% Assume the current 1-year forward rate of the Swiss franc is $0.50/SF and the current spot rate of the Swiss franc is SO 48/SE Which alternative should Parker Company choose? Forward Hedge Money market hedge
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