Question
Suppose INTC has a 5 billion USD worth of profit it is expecting to collect from its subsidiary in Hong Kong in 12 months. The
Suppose INTC has a 5 billion USD worth of profit it is expecting to collect from its subsidiary in Hong Kong in 12 months. The current exchange rate is at $7.7885 HKD per $1 and the interest rate in Hong Kong is 3.5% and the interest rate in the US is 2.5%? The one year forward rate available to INTC is $7.8825. Should INTC carryout a Money Market Hedge or forward hedge?
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International financial management
Authors: Jeff Madura
9th Edition
978-0324593495, 324568207, 324568193, 032459349X, 9780324568202, 9780324568196, 978-0324593471
