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THANKS! (4 UPVOTES) The CFE will receive a payment from a North American client within 7 days for 50 thousand dollars. Anticipating an adjustment in
THANKS! (4 UPVOTES)
The CFE will receive a payment from a North American client within 7 days for 50 thousand dollars. Anticipating an adjustment in the exchange rate, he decides to hedge with futures. In the Mexder an initial contribution of $ 18,700 per contract is requested and in Mexico the interest rates are at 6.50% and in the United States at 0.25%. This information and the spot exchange rates shown in the following table will allow answering the following questions a) The future exchange rate with 3 days before the expiration of the contract is: $18.5807 $18.5196 $18.6000 SPOT EXCHANGE RATES (TCS) DxV SPOT FUTURE 7 $18.5095 6 $18.5550 5 $18.5375 4 $18.4950 3 $18.5100 $18.5225 1 $18.5775 0 $18.6000 $18.5536 $18.5743 $18.5078 2. $18.5289 $18.5320 b) Considering the initial and final spot exchange rates, as well as the cash flows produced by the contract and after covering the additional expenses for the depreciation of the exchange rate in the period, it is known that the CFE will receive an additional amount of: $4,525.00 $2,530.35 $925,475.00 $930,000.00Step by Step Solution
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