Question
Sooter Ltd. sold $4.2 million Australian dollars (AUD) worth of goods to a Japanese company, Ashi Trading. Ashi has to make payment in 60 days
Sooter Ltd. sold $4.2 million Australian dollars (AUD) worth of goods to a Japanese company, Ashi Trading. Ashi has to make payment in 60 days and its bank has provide a forward rate quote of Japanese Yen, JPY90.6369 = 1AUD.
If the spot rate on the date of payment is JPY86.1566=1AUD, will Ashi save or lose by hedging with a forward contract, and by how much?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Lets analyze the situation 1 Spot Rate The spot rate on the date of payment is JPY861566 ...
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Modern Advanced Accounting in Canada
Authors: Hilton Murray, Herauf Darrell
8th edition
1259087557, 1057317623, 978-1259087554
