Question
The Australia Import Company owes 200,000,000 to a Japanese exporting company. This payment is due in one year's time. The current spot rate is 84/A$.
The Australia Import Company owes 200,000,000 to a Japanese exporting company. This payment is due in one year's time. The current spot rate is 84/A$. The applicable interest rates for the company are 0.08 per annum in Japan and 0.12 per annum in Australia. If the company hedges in the money market, what are its dollar costs in one year's time? Calculate to the nearest dollar.
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Bond Markets Analysis and Strategies
Authors: Frank J.Fabozzi
9th edition
133796779, 978-0133796773
