Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

Question 10 of 10 -74 III Current Attempt in Progress Oriole Corp. has just made a sale to a British customer. The sale was for

image text in transcribed
image text in transcribed
Question 10 of 10 -74 III Current Attempt in Progress Oriole Corp. has just made a sale to a British customer. The sale was for a total value of 135,500 and is to be paid 60 days from now. Oriole management is concerned that the British pound will depreciate against the US dollar and plans to hedge this risk. The company's bank informs management that the spot rate is $1.2550/E and the 60 day forward rate is $1.2350/E, 1 Oriole sells its pounds receivable at the forward rate, what is the dollar value of its receivables? (Round answers to 2 decimal places, 13. 15.25) Value of receivables $ If it did not enter into a forward contract and the spot rate 50 days later is 51.2150/6. how much would the company lose by not hedging? (Round answers to 2 decimal places, eg. 15.25) Loss incurred by not hedging $ Attempts unlimited S mit A Question 10 of 10 1/4 ill Current Attempt in Progress Oriole Corp. has just made a sale to a British customer. The sale was for a total value of 135.500 and is to be paid 60 days from now. Oriole management is concerned that the British pound will depreciate against the U.S. dollar and plans to hedge this risk. The company's bank informs management that the spot rate is $12550/E and the 60-day forward rate is $1.2350/. If Oriole sells its pounds receivable at the forward rate, what is the dollar value of its receivables? (Round answers to 2 decimal places. es. 15.25) Value of receivableiss If it did not enter into a forward contract and the spot rate 60 days later 3512150/, how much would the company one by not hedging? (Round answers to 2 decimal places, eg 15.25) Loss incurred by not hedatinis $ Attempts unlimited Submit Alam

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions

Question

What is the cerebrum?

Answered: 1 week ago