Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Question 10 2 pts ABC, a U.S. based MNC, plans to use a money market hedge to hedge its payment of 5 million New Zealand
Question 10 2 pts ABC, a U.S. based MNC, plans to use a money market hedge to hedge its payment of 5 million New Zealand dollars (NZD) for NZ goods in 2 years. The nominal annual U.S. interest rate is 6% while that of NZ is 10%. The spot rate of the NZD is $0.68 while the 2 year forward rate is $0.63. What is the amount of U.S. dollars needed in 2 years if a money market hedge is used rounded to the nearest whole dollar amount? Time Ru Attempt du 28 Minut $3,276,637 o $3,157,223 $3.276.364 $5,000,000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started